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Board Compensation
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During 2009, annual compensation for directors, other than the President and CEO, consisted of cash compensation and deferred compensation as follows: annual retainer, meeting attendance fees and Deferred Share Units (DSUs). Each of these components is described in more detail below.
The following table describes the director compensation structure in place during 2009 as compared to the previous two years:
| |
2009 |
2008 |
2007 |
| Annual Non-Executive Board Chair Retainer (taken in DSUs) |
$160,000 |
$160,000 |
$125,000 |
| Annual Director Retainer (cash or optional DSUs) |
$45,000 |
$45,000 |
$35,000 |
| Annual Committee Chair Retainer (cash or optional DSUs) |
$15,000 |
$15,000 |
$15,000 |
| Annual Retainer paid in DSUs (equity component) |
$30,000 |
$30,000 |
$30,000 |
| Board and Committee Meeting Attendance Fee |
$1,500 |
$1,500 |
$1,500 |
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The following table summarizes director compensation for 2009:
Individual Director Compensation - 2009
|
Fees
Earned(1)
$
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Share Based
Awards
(DSUs)(2)
$
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All Other
Compensation(3)
$
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Total
$
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| Peter E. Case |
66,000 |
30,000 |
28,000 |
124,000 |
| Frank J. Crothers |
55,500 |
30,000 |
96,258 |
181,758 |
| Ida J. Goodreau |
13,500 |
49,525 |
41,000 |
104,025 |
| Douglas J. Haughey |
44,547 |
19,812 |
- |
64,359 |
| Geoffrey F. Hyland |
30,000 |
190,000 |
14,000 |
234,000 |
| Linda L. Inkpen (4) |
4,500 |
75,000 |
- |
79,500 |
| H. Stanley Marshall (5) |
- |
- |
- |
- |
| John S. McCallum |
24,000 |
90,000 |
64,000 |
178,000 |
| Harry McWatters |
13,500 |
75,000 |
107,250 |
195,750 |
| Ronald D. Munkley |
40,047 |
19,812 |
- |
59,859 |
| David G. Norris |
27,000 |
90,000 |
61,000 |
178,000 |
| Michael A. Pavey |
61,500 |
30,000 |
- |
91,500 |
| Roy P. Rideout |
79,500 |
30,000 |
- |
109,500 |
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| Total |
459,594 |
729,149 |
411,508 |
1,600,251 |
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| (1)
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These amounts include all fees payable in cash for services as a director of Fortis, including annual director and committee chair retainers and meeting fees.
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| (2)
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These amounts represent the annual equity compensation in the form of DSUs granted to a director of Fortis. These include both the
mandatory equity component of the annual retainer of $30,000 and any optional component of the annual director retainer or committee
chair retainer as directed to be paid in DSUs rather than cash. These amounts represent the cash equivalent at the time of issue. During
2009, the cumulative DSU holdings of participants increased by the notional reinvestment of dividends.
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| (3)
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These amounts include all fees paid or payable by a subsidiary of Fortis to a director in his(her) capacity as a director of the payor
subsidiary. In the case of Mr Crothers, fees were paid in US dollars ($84,370) and converted into Canadian dollars at a rate of 1.1409.
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| (4)
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Dr. Inkpen retired from the Board effective 5 May 2009. Dr. Inkpen did not stand for re-election because she had served ten years on the
Board since the introduction of the director tenure policy in 1999.
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| (5)
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Mr. Marshall, as CEO, does not receive compensation as a director of Fortis. Director fees paid to Mr. Marshall from subsidiaries of Fortis are reported in note 5 of the Summary Compensation Table on page 34 of Management Information Circular dated 22 March 2010.
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In 2004, the Board introduced the Directors’ Deferred Share Unit Plan (DSU Plan) as an optional vehicle for directors to elect to receive credit of their annual cash retainer in DSUs. The Board may also determine from time to time that special circumstances exist that would reasonably justify the grant of DSUs to a director as compensation in addition to any regular retainer or fee to which the director is entitled. During 2006, the Board elected to discontinue the grant of stock options to directors and initiated an annual grant of DSUs.
DSUs granted in lieu of cash payment of annual retainer are credited to participating directors as of 1 January of each year by dividing the total applicable annual retainer by the average of the daily average of the high and low board lot trading prices of the Common Shares on the TSX for the last five (5) trading days immediately preceding the grant of the DSUs. Additional DSUs are credited on the quarterly dividend payment dates as notional dividends are assumed to be reinvested.
The annual grant of DSUs, that comprises the equity component of Fortis annual directors’ compensation, is credited to all directors who are not officers of Fortis as of the grant date at the average of the daily average of the high and low board lot trading prices of the Common Shares on the TSX for the last five (5) trading days immediately preceding the grant of the DSUs. On 1 January 2009, directors who were not officers of Fortis were each granted 1,247 DSUs at a price of $24.049, equivalent to approximately $30,000 in value. Additional DSUs are credited on the quarterly dividend payment dates as notional dividends are assumed to be reinvested.
Upon retirement from the Board, a director participant in the DSU Plan will receive a cash payment equivalent to the number of DSUs credited to the notional account multiplied by the average of the daily average of the high and low board lot trading prices of Fortis Common Shares on the TSX for the last five (5) trading days immediately preceding the date of payment.
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