EDF votes against Constellation executive pay

French utility is Constellation's largest shareholder and nuclear partner

May 25, 2011|By Hanah Cho, The Baltimore Sun

Constellation Energy Group's largest shareholder is voting against CEO Mayo A. Shattuck's compensation.

The move by French utility EDF is largely symbolic because Constellation's board will not be bound by the outcome of the "say on pay" proposal, but it is the latest spotlight on Shattuck's pay.

Two influential shareholder groups — Glass, Lewis & Co. and Institutional Shareholder Services — recently advised Constellation shareholders to vote against the company's compensation packages, saying executive pay was out of line with the company's performance last year.

Constellation is holding its annual meeting Friday, where the results of the executive compensation vote will be announced.

"EDF has independently concluded that there has been a clear disconnect between Constellation's performance and the proposed evolution of senior executive compensation," EDF spokeswoman Kelly Sullivan said Wednesday in a statement. "EDF will thus be planning to vote against the resolution approving the executive remuneration package in parallel with other shareholders who will be voting no in accordance with the ISS and Glass Lewis recommendations or otherwise voting against the remuneration package".

‬Shattuck's total compensation last year was valued at $15.7 million, according to regulatory filings, up from $10.9 million in 2009. Much of the year-over-year increase came from changes in the accounting value of his pension and deferred earnings.

Excluding that accounting change of $4.9 million, Shattuck was paid $10.8 million in base salary, cash incentive, stocks, options and perks.

Constellation, the parent of utility Baltimore Gas & Electric Co., posted a loss of $982.6 million last year, due in part to the reduced value of its nuclear power business. The company posted a profit of $4.4 billion in 2009.

Constellation spokesman Lawrence McDonnell said Wednesday that "the overwhelming proportion of CEO compensation is performance-based, benchmarked against peers and structured to fully align with shareholder interests."

EDF holds 14.5 million Constellation shares, or a 7.26 percent stake in the company. Besides being Constellation's largest shareholder, EDF owns nearly half of Constellation's nuclear power plants in Maryland and New York.

EDF is reviewing Constellation's deal to sell itself to Chicago-based Exelon Corp., which was announced last month. The French utility is looking at the ways the sale will impact its nuclear joint venture with Constellation.

Baltimore money manager T. Rowe Price Group is the second largest shareholder, with nearly 13.9 million shares, or a 6.9 percent stake in the company.

hanah.cho@baltsun.com

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