ca-np-199 requests for information np 2016/2017 gra

CA-NP-199

Requests for Information NP 2016/2017 GRA

Newfoundland Power – 2016/2017 General Rate Application of 1

Q. Did Newfoundland Power have external expertise to assist with the review of 1

salaries and wages from the period 2012 onward? If so, please provide a copy of 2

each such report provided to Newfoundland Power. 3

4

A. Newfoundland Power uses Hay Group Limited (the “Hay Group”) to provide external 5

expertise to assist with the review of salaries and wages for executive and senior 6

management employees. 7

8

Attachment A contains Hay Group’s correspondence regarding executive compensation 9

for 2012 to 2015. 10

11

Attachment B contains Hay Group’s correspondence regarding director compensation for 12

2012 to 2015. 13

14

Newfoundland Power used Towers Watson & Co (“Towers Watson) to assist in a review 15

of managerial compensation during the period. 16

17

Attachment C contains the Towers Watson Reward Review Recommendations, May 21, 18

2013. 19

20

Attachment D contains the Towers Watson Salary Range Design Considerations, 21

February 13, 2014. 22

CA-NP-199

Attachment A


Newfoundland Power – 2016/2017 General Rate Application

Hay Group’s Recommendations for

Newfoundland Power’s Salary Policy for Executive

2012 to 2015

CA-NP-199, Attachment A Page 1 of 36

NEWFOUNDLAND~~

POWER A FORTIS COM"'ANY

October 14, 2011

Mr. Earl Ludlow President & Chief Executive Officer Newfoundland Power P. 0. Box 8910 55 Kenmount Road St. John's, NL AlB 3P6

Dear Mr. Ludlow,

Hay Group Limited 121 King Street West Suite 700 Toronto, ON M5H 3X7 Canada

tel +1.416.868.1371 fax +1.416.868.6871

www.haygroup.com/ca

Re: Executive Compensation- 2012 Estimated Market Actual Salary Median

We have been asked to provide estimated market actual salary levels in 2012 for members of your executive group.

Our views are based upon the current evaluation of the roles using the Hay Group job evaluation methodology and compensation information in the Hay Group database accumulated from the Commercial Industrial market effective May 1, 2011. The companies included in this sample are listed in Appendix A.

Table 1, on the following page, illustrates the estimated 2012 market actual salary medians (Column 6) for Newfoundland Power. This is based on 2011 market actual salary data (Column 5) adjusted upwards by 2.9%, based on data collected between July and August 2011, to estimate 2012 market practice.


Mr. Ludlow October 14, 2011

Table 1 -Estimated Newfoundland Power 2012 Executive Market Actual Salary Medians - - -

r:~nmatro 1011 P~..Jt f ll-u• :J.,;lf\v•rnmrf la''~' r~tlm:t!=-tJI 20 J l Curnml AnaJ,j;l Si.IJ•'W "'ledi:m l>ot.uetl )01 1 Aru.,,d 1011 Nlur~L"t ~r:, l .-1 r.~ .. ~~~~t ~~ttl!H I 1.!JOiry

Posi tiOn h 1aJU\IDOI" (m 1D10) ~~~~ ~ldltlj ~nllry r.t~(t j ,IH Mt!tHJil

Pl t2l r:;J 141 lSI__ rUJ

President & CEO- ~ ·. ·.loud ~W

VP Customer Operations & 1708 $251,000

Engineering- G. Smith

VP Finance & CFO • J. Perry 1560 $230,800

VP Regulatory Affair & General 1560 $212,ooo•

Counsel- P.S. Alteen

"Reflects previous evaluation of 1418

I will be happy to answer any questions that may arise.

Sincerely, Hay Group Limited

Christopher A. Chen, LLB National Director Executive Compensation

cc: Barry Perry, Fortis Inc.

· !I&S'OOO

$256,000 $248,700 $255,900

$230,000 $227,900 5234,500

$230,000 $227,900 $234,500



Appendix A - Commercial Industrial Comparator Group (N == 268)

3M Canada Company

A&W Food Services of Canada Inc.

ABB Inc.

ACA Co-operative Limited

ATCO 1-Tek

AV Nackawic Inc.

Abbott Laboratories, Limited

Agfa Healthcare Canada

Agfa Inc.

Air New Zealand

Air Products Canada Ltd.

Aker Chemetics

Akzo Nobel Canada Inc.

Alamos Gold Inc.

Alberta-Pacific Forest Industries Inc.

Alcon Canada Inc.

Allergan Canada Inc.

Aluminerie Alouette Inc.

Amcor Limited

Amgen Canada Inc.

Amway Canada Corporation

Andrew Peller Limited

ArcelorMiltal Dofasco Inc.

ArcelorMiltal Mines Canada

ArcelorMittal Tubular Products - Automotive Division

Arrow Transportation Systems Inc.

Ashland Inc.

Ashland Inc. - Global Chemicals

Ashland Inc. - Performance Materials

Ashland Inc. - Valvoline

Ashland Inc. -Water Technologies

Astellas Pharma Canada Inc.

AstraZeneca Canada Inc.

Atlantic Packaging Products Ltd.

Atotech Canada Ltd.

Autopro Automation Consultants Ltd.

Janssen Inc.

John Deere Limited Canada

Jubilant Life Sciences Limited - Draximage

Jubilant Life Sciences Limited - Draxis Pharma

Katz Group Canada Ltd.

Kellogg Canada Inc.

Kennametal Ltd.

Kimberly-Clark Corporation

Kinross Gold Corporation

Kruger Products

Kuehne + Nagel Ltd.

LANXESS Inc.

LS Travel Retail North America

La batt Breweries of Canada

Lake Shore Gold Corp.

Lantic Inc.

Lego Systems. Inc.

Lehigh Hanson

Linde Canada Limited

Lotus Bakeries

Lowe's Companies, Inc.

MDA

Mainstream Canada Ltd.

Mark Anthony Group

McCormick Canada Co.

McEihanney Consulting Services Ltd.

The McEihanney Group Ltd.

McEihanney Land Surveys Ltd.

Meridian Lightweight Technologies Inc.

Methanex Corporation

Michelin North America (Canada) Inc.

Minas Basin Pulp & Power Co. Ltd.

Mitsubishi Canada Limited

Montship Inc.

Morneau Sobeco Income Fund

The Mosaic Company

Page 3of6


Mr. ludlow October 14, 2011

BASF Canada Inc.

BHP Billiton - Ekati Diamond Mines

BHP Billiton Canada Inc.

Babcock & Wilcox Canada ltd.

BakeMark Ingredients Canada ltd.

Barkervllle Gold Mines ltd.

Barrick Gold Corporation

Basell Canada Inc.

Baxter Corporation

The Bay

Bayer Inc.

The Beer Store

Black Cat Blades ltd.

Blue Mountain Resorts limited

Boehringer lngelheim (Canada} ltd.

Bombardier T ransportalion Canada Inc.

Brink's Canada Limited

Bristol-Myers Squibb Canada Co.

Britco Structures Inc.

Broan-NuTone Canada Inc.

Bruce Power

Bunge North America

CHEPCanada

CKF Inc.

CNH America, LLC.

Cabot Canada Ltd.

Campbell Company of Canada

Canada Safeway Limited

Canadelle Inc.

Canadian Forest Products Ltd.

Canadian National Railway Company

Canadian Pacific Railway

Canexus Limited

Cantor Pulp Limited Partnership

Canon Canada Inc.

Canpotex Limited

Cargill Limited

Catalyst Paper Corporation

Mustang Survival Corp.

Mylan Pharmaceuticals ULC

NOVA Chemicals Corporation

Navtech Systems Support Inc.

Neopost Canada

Newmont Mining Corporation of Canada limited

MDS Nordion

North Allanlic Refining

Northern Pulp Nova Scotia Corp.

Nova Scotia Power Inc.

Novartis Pharmaceuticals Canada Inc.

Novo Nordisk Canada

Nycomed Canada Inc.

Oak.run Farm Bakery Ltd.

Omicron

L'Ortlal Canada Inc.

P & H MinePro Services

PPG Canada Inc.

PPG Canada Inc. - Fine Chemicals Division

PPG Canada Inc. - Industrial Coatings Division

PPG Canada Inc. - Performance Glazing Division

Pan American Silver Corporation

Penske Truck Leasing

PepsiCo Canada

Phantom Mfg. (lnt'l) Ltd.

Pharmascience Inc.

Philips Electronics Ltd.

Pioneer Hi-Bred Limited

Potash Corporation of Saskatchewan Inc.

Praxair Canada Inc.

Procter & Gamble Inc.

Puratos Canada Inc.

Rlchemont Canada Inc.

Rio Tinto - Diavik Diamond Mines

Rio Tfnto - Fer et Titane Inc.

Rio Tinto Iron Ore

Ritchie Bros. Auctioneers (Canada) Ltd.

Rogers Communications Inc.

Page 4 of6



Caterpillar of Canada Corporation

Centerra Gold Inc.

Christie Digital Systems Inc.

The Churchill Corporation

Co-op Atlantic

Cognis Canada Corporation

Compass Group Canada

Country Ribbon Inc.

Cytec Canada Inc.

DENSO Manufacturing Canada, Inc.

DSM Nutritional Products Canada Inc.

Daishowa-Marubeni International Ltd.

Danone Canada Inc.

De Beers Canada Inc., Corporate Division

De Beers Canada Inc., Exploration Division

De Beers Canada Inc., Mining Division

Deeley Harley-Davidson Canada

Direct Energy Marketing Ltd.

Dow Chemical Canada Inc.

Dow Corning Canada Inc.

Dr Pepper Snapple Group

Dr. Oetker Ltd.

Dundee Precious Metals

Dyno Nobel Canada Inc.

EFW Radiology

E. I. duPont Canada Company

EMD Serono Canada Inc.

ERCO Worldwide

EWOS Canada Ltd.

Eli Lllly Canada Inc.

Elkem Mtltal Canada Inc.

Essar Steel Algoma Inc.

Ferrero Canada Limited Commercial Division

Ferrero Canada Limited Industrial Division

Finning lntemalional Inc.

Fisher & Paykel Healthcare Inc.

Forbo Linoleum Inc.

Gates Canada Inc.

··- --- --- --, HayGrou.p~

L

Rothmans, Benson & Hedges Inc.

Russel Metals Inc.

SABIC Innovative Plastics Canada Incorporated

SEMAFOinc.

SMS Equipment Inc.

Saint-Gobain Abrasives Canada Inc.

Saint-Gobain Ceramic Materials Canada/Abrasive Materials

sanofi-aventis

Schneider Electric

Sears Canada Inc.

The Shaw Group Limited

Sherrill International Corporation

Shire BloChem inc.

Shiseldo (Canada) Inc.

Shoppers Drug Mart Corporation

Shore Gold Inc.

Slegwerk Canada Inc.

Siemens Canada Limited

Silver Standard Resources Inc.

Sleeman Breweries Ltd.

Societe en Commandite Tafisa Canada Inc.

Sofina Foods Inc.

Sonoro Canada Corporation

Sultran Ltd.

TELUS Communications Inc.

TVI Pacific, Inc.

Tail Electronics Ltd.

Takeda Pharmaceuticals North America, Inc.

Taro Pharmaceuticals Inc.

Tech Data Canada Corporation

T eck Resources Limited

Teck Resources Limited - Highland Valley Copper

Teck Resources Limited- Trail Operation

Teekay Corporation

Tembec Inc.

Thales Rail Signalling Solutions

Thompson Creek Metals Company

Thrifty Foods Inc.

Page 5 of6



General Kinetics Engineering Corporation

Gerdau Ameristeel

GlaxoSmithKiine Inc.

Graceway Pharmaceuticals

Graham & Brown

Grand & Toy

Griffith Laboratories Limited

Group SEB Canada Inc.

Henkel Canada Corporation

Hilti (Canada} Ltd.

Hobart Food Equipment Services Canada

Hoffmann-La Roche Ltd.

The Home Depot Canada

Hudson's Bay Company

HumanWare

Hunter Dickinson Inc.

Huntsman Polyurethane

INVISTA (Canada} Company

ITW Construction Products

Ingersoll-Rand Canada Inc.

lnnophos Canada Inc.

J. H. Ryder Machinery Limited

I HayGroup®

limberWest Forest Corp.

Tlmminco Limited

Tolko Industries Ltd.

Toromont CAT, A Division of Toromont Industries Ltd.

Trane Canada Co.

Twin Rivers Paper Company

Ultramar Ltee uniPHARM Wholesale Drugs Ltd.

Uranium One Inc.

Vale lnco Limited

Vicwest Income Fund

Viterra Inc.

Votorantim Cement North America

VPL Enterprises Ltd.

Wai-Mart Canada Corp.

Wescast Industries Inc.

West Fraser Timber Co. Ltd.

Winners Merchants International LP.

Xstrata Copper Canada

Yara Belle Plaine Inc.

Zellers

Zellstoff Celgar Partnership Limited

Page 6 of6


NEWFOlJNOI.ANO~·

POWER

January 16, 2013


Dear Mr. Ludlow,


tel +1.416.868.1371 fax +1.416.868.6871

www.haygroup.com/ca

Re: Executive Compensation - 2013 Estimated Market Actual Salary Median



Table 1, on the following page, illustrates the estimated 2013 market actual salary medians (Column 7) for Newfoundland Power. This is based on 2012 market actual salary data (Column 6) adjusted upwards by 2.9%, based on data collected between July and August 2012, to estimate 2013 market practice.

Page 1 of 5


-~·-® -

Table 1 -Estimated Newfoundland Power 2013 Executive Market Actual Salary Medians -- -- -- - -

~•tu.,ur~d 7m2 I\Jev.fouttd i31'1Cl

M~rT<el Mtu.tl !'ower 701} M~•lml t\ltrn~IJ'r.i711B

LUI!ertl s:tf.,,y M~dwn 1011 At:1u~l llnu.t! :;;;tary M:trkct 4~ht~l

Pilsetlon 11twmne"t Evoluet!ton ltn 10111 llaE~ Sol3t'' Median ~ol•"o· Mt:<lia~

Ill Pl I ~l t''l _[51 _ {cJ [ I I

President & CEO EtA.liJ'dltiw 2 $37 ,lOD $4®i~o·o . $3'7.0;700 sa~,t.Joo

VP Customer Operations G. Smith 1708 $255,900 $265,000 $254,600 $262,000

& Engineering

VP Finance & CFO jt ~wry ~rts:6c· $134~00 $:!4£!!9® ~.11110 $~41,~00

VP Regulation & Planning P.S. Alteen 1560 $234,500 $240,000 $234,400 $241,200



Christopher A. Chen, LLB National Director, Executive Compensation


January 16, 2013 Page 2 of 5

CA-NP-199, Attachment A Page 9 of 36- -- - --

- - ----- -

l - -~-Appendix A- Commercial Industrial Comparator Group

(N = 275)

3M Canada Company A&W Food Services of Canada Inc. ALS Canada Ltd. AMEC Inc. ATCO 1-Tek Abbott Laboratories, Limited Acuity Brands Agfa Healthcare Canada Agfa Inc. Ainsworth Engineered Canada L. P. Air Products Canada Ltd. Akzo Nobel Canada Inc. Alamos Gold Inc. Alberta-Pacific Forest Industries Inc. Alcon Canada Inc. Aluminerie Alouette Inc. Amgen Canada Inc. Amway Canada Corporation ArcelorMittal Canada ArcelorMittal Canada Contrecoeur-Ouest Inc. ArcelorMittal Canada Hamilton ArcelorMittal Canada Saint-Patrick ArcelorMittal Dofasco Inc. ArcelorMittal Mines Canada ArcelorMittal Tubular Products -Automotive Division Arrow Transportation Systems Inc. Astellas Pharma Canada Inc. AstraZeneca Canada Inc. Atlantic Packaging Products Ltd. Atlantic Poultry Incorporated Atotech Canada Ltd. BASF Canada Inc. BHP Billiton - Ekati Diamond Mines BHP Billiton Canada Inc. BIC Graphic Canada Babcock & Wilcox Canada Ltd. BakeMark Ingredients Canada Ltd. Barilla Barrick Gold Corporation Basell Canada Inc. Baxter Corporation The Bay Bayer Inc. Bekaert Canada Belden COT (Canada) Inc. Bericap North America Inc. Blue Mountain Resorts Limited

Boehringer lngelheim (Canada) Ltd. Bombardier Transportation Canada Inc. Brink's Canada Limited Bristol-Myers Squibb Canada Co. Broan-NuTone Canada Inc. Bruce Power L.P. CAE Inc. CGGVeritas CHEP Canada Inc. CKF Inc. CNH America, LLC. Cabot Canada Ltd. Campbell Company of Canada Canadelle Inc. Canadian Forest Products Ltd. Canadian National Railway Company Canadian Pacific Railway Canexus Limited Canfor Pulp Limited Partnership CannAmm Occupational Testing Services Canon Canada Inc. Canpotex Limited Cargill Limited Catalyst Paper Corporation Caterpillar Logistics Services Canada Limited Caterpillar of Canada Corporation Caterpillar Tunneling Canada Corporation Centerra Gold Inc. Christie Digital Systems Inc. Chubb Edwards The Churchill Corporation Compass Group Canada Co-op Atlantic CotyCanada Country Ribbon Inc. DP World Canada DSM Nutritional Products Canada Inc. Danfoss Inc.

De Beers Canada Inc., Corporate Division De Beers Canada Inc., Exploration Division De Beers Canada Inc., Mining Division Deeley Harley-Davidson Canada Detour Gold Corporation Direct Energy Marketing Ltd. Dow Chemical Canada Inc. Dr. Oetker Ltd. Dynaplast Extruco Inc.



EFW Radiology E.l. du Pont Canada Company EMD Serono Canada Inc. ERCO Worldwide EWOS Canada Ltd. Eli Lilly Canada Inc. Elkem M~tal Canada Inc. Essar Steel Algoma Inc. Finning Canada Finning International Fisher & Paykel Healthcare Inc. G4S Cash Services (Canada) Ltd. Gates Canada Inc. General Kinetics Engineering Corporation Gerdau Ameristeel GlaxoSmithKiine Inc. Goldcorp Inc. Golf Town Graham & Brown Grand & Toy Griffith Laboratories Limited Henkel Canada Corporation Henry Schein Canada Hilti (Canada) Ltd. Hobart Food Equipment Services Canada Hoffmann-La Roche Ltd. Home Outfitters HudBay Minerals Inc. Hudson's Bay Company HumanWare Hunter Dickinson Inc. Huntsman Polyurethane INEOS Canada Partnership INVISTA (Canada) Company Ingersoll-Rand Canada Inc. lnnophos Canada Inc. Janssen Inc. John Deere Limited Canada Johnson Matthey Ltd. K+S Potash Canada KGHM International Ltd. K.l. Pembroke KPMGMSLP Kellogg Canada Inc. Kemira Chemicals Canada Inc. Kennametal Ltd. Kimberly-Clark Corporation

Kinross Gold Corporation Kongsberg Automotive Kruger Products LANXESS Inc. Labatt Breweries of Canada Lake Shore Gold Corp. Lantic Inc. Lantic Inc. - Rogers Sugar Division Lego Systems, Inc. Lehigh Hanson Leo Pharma LifeLabs Linamar Loblaw Companies Limited Lotus Bakeries Lowe's Companies, Inc. Lundin Mining Corporation MDA MERSEN Canada Dn ltd. MERSEN Canada Toronto Inc. Maidstone Bakeries Co. Mainstream Canada ltd. McCoy Corporation McEihanney Consulting Services Ltd. The McEihanney Group ltd. McEihanney Land Surveys Ltd. Merz Pharma Canada Methanex Corporation Michelin North America (Canada) Inc. Minas Basin Pulp & Power Co. Ltd. The Minto Group Mitsubishi Canada Limited Montship Inc. Morneau Shepelllnc. The Mosaic Company Navtech Systems Support Inc. North American Palladium ltd. North Atlantic Refining Northern Pulp Nova Scotia Corp. Novartis Pharmaceuticals Canada Inc. Novo Nordisk Canada Omicron L'Omal Canada Inc. Otis Spunkmeyer Canada Limited Outotec (Canada) Ltd. OxyVinyls Canada Inc. PPG Canada Inc.



PPG Canada Inc. - Fine Chemicals Division PPG Canada Inc. - Industrial Coatings Division PPG Canada Inc. - Performance Glazing Division Pan American Silver Corporation Penske Truck Leasing PepsiCo Canada Phantom Mfg. (lnt'l) Ltd. Pharmascience Inc. Philips Electronics Ltd. Pioneer Hi-Bred Limited Potash Corporation of Saskatchewan Inc. Praxair Canada Inc. Procter & Gamble Inc. Purdue Pharma Randstad Canada Richemont Canada Inc. Rio linto - Diavik Diamond Mines Rio linto Iron Ore Ritchie Bros. Auctioneers (Canada) Ltd. Rolls-Royce Canada Ltd. Rothmans, Benson & Hedges Inc. Runge Limited Russel Metals Inc. SABIC Innovative Plastics Canada Incorporated SEMAFOinc. SNC-Lavalin Group Inc. Saint-Gobain Abrasives Canada Inc. Saint-Gobain Ceramic Materials Canada/Abrasive Materials sanofi-aventis Saskatchewan Rough rider Football Club Schneider Electric Sears Canada Inc. The Shaw Group Limited Sherritt Coal Shiseido (Canada) Inc. Shore Gold Inc. Siegwem Canada Inc. Sika Canada Inc. Silver Standard Resources Inc. Sleeman Breweries Ltd. Socilfltll en Commandite Tafisa Canada Inc. Sofina Foods Inc. Sonoco Canada Corporation Sultran Ltd.

l_HayGroup .. - ~· ---- -

Suncor Energy Inc. Syncrude Canada Ltd. TELUS Communications Inc. lVI Pacific, Inc. Tail Electronics Ltd. Takeda Canada Inc. Taro Pharmaceuticals Inc. T eck Resources Limited Teck Resources Limited - Highland Valley Copper Teck Resources limited- Trail Operation Teekay Corporation Tembec Inc. Teranet Inc. Tetley Canada Inc. Teva Canada Limited Thompson Creek Metals Company limberWest Forest Corp. Tolko Industries Ltd. TomTom International Toromont CAT, A Division of Toromont Industries Ltd. Toys nR" Us (Canada) Ltd.

Ultramar Ltlle uniPHARM Wholesale Drugs Ltd. Uranium One Inc. Vale lnco Limited Vallourec Tubes Canada Inc. VAM Canada Viterra Inc. Votorantim Cement North America VPL Enterprises ltd. VWR International W.E.T. Automotive Systems Ltd. Wai-Mart Canada Corp. WD-40 Products Canada Ltd. Wescast Industries Inc. West Fraser limber Co. Ltd. Winners Merchants International L.P. Xstrata Copper Canada Xstrata Nickel Canada Xstrata Zinc Canada Yara Belle Plaine Inc. Yukon Zinc Corporation Zellstoff Celgar Partnership Limited



NEWFOlJNOLAND -=-..-%=

POWER A FORTIS COMPANY

October 2, 2013

Mr. Earl Ludlow President & Chief Executive Officer Newfoundland Power P. 0. Box 8910 55 Kenmount Road St. John's, Newfoundland AlB 3P6

Dear Mr. Ludlow,

···- - - ------- ------


tel +1 .416.868.1371 fax +1.416.868.6871

www.haygroup.com/ca

Re: Executive Compensation - 2014 Estimated Market Actual Salary Median

We have been asked to provide estimated market actual salary levels in 20 14 for members of your executive group.


Table 1, on the following page, illustrates the estimated 2014 market actual salary medians (Column 7) for Newfoundland Power. This represents 2013 market actual salary data (Column 6) adjusted upwards by 2.5%, based on data collected in July 2013 for the purpose of estimating 2014 market practice.


Mr. Earl ludlow Newfoundland Power

----------------l ___ HayGroup_ -111 __ _

Table 1- Estimated Newfoundland Power 2014 Executive Market Actual Salary Medians

- I I E!:llm a!~<l111U i N~wr<><~mll~"'l I I -M~ · ·~• A.:tu ;;t t Po wH l OB l 01J M~rkcl Fsln•a ted :1i!1 ~

Cu•t., tlt S;ol:try Medi a •• A.:-IJ>;; I a;;:;;;o -'~.~:lu" l S.t!.t"' ~.<., t loie 1 1\ t. llllti

l'o-!>!1ion lncOJm tH! n l E.va !u.:~!hln jon~~~) I S<thny Me dl nn S;~ l 01ry IMdtan

111 fl l r>J r-:t 1"1 tul Pl

p~~_@i~-:6 Ci::o ~· -~ . ~ .~·

VP Customer Operations & G. Smith 1708 $262,000

Engineel1ng

" -~fl (ll~ - 'q:#i:i .r~ ~~ li.~f1~P

VP Regulation & Planning P.S. Alteen 1560 $241,200





~· ~;.~ ~IT1 '-

$275,000 $262,100 $268,700

;$~(QOi!l ::s:l41r~tl'JI) 32~MOO

$250,000 $241,100 $247,100

October 2, 2013 Page 2 of 4


I

Mr. Earl Ludlow Newfoundland Power

Appendix A- 2013 Commercial Industrial Market (n=260)

3M Canada Company AAW Food Servioes of Canada Inc. ALS Canada Ltd. AMEC Americas Umited ATCOI-Tek AV Nackawlc Inc. Abbott Laboratories, Limited Ainsworth Eogtneerad Canada L. P. Air Products Canada Ltd. ~Nobel Canada Inc. Alamos Gold Inc. Alberta Newsprint Company Alberta-Pacific Forast Industries Inc. Alcon Canada Inc. AllellJan Canada Inc. Amcor Rigid Plastics Amgen Canada Inc. Arrrway Canada CorporaUon Andrew Peller Limited Apple Canada Inc. Aptalis Phanna Inc. ArcelorMitlal Canada ArcelorMittal Canada Conlnlcoeur-Ouesllnc. AroelorMittal Canada HamUton ArcelorMillsl Canada Saint-Patrick ArcelorMillsl Dofasco Inc. ArcelorMitlal Mines Canada ArcelorMit1al Tubular Products- Automotiw Division An:her-Danlets-Midland Company (Canada) Ltd. Aria Foods Inc. ArrrNi Transportation SysiBms Inc. Ashland Inc. Aslellas Phanna Canada Inc. AstraZeneca Canada Inc. AUantic Packaging Products Ltd. Atolech Canada Ltd. Avis Budget Group, Inc. BASF Canada Inc. BHP BUllion Canada Inc. BIC Graphic Canada Babcock & Wilcox Canada Ltd. Barilla Barrick Gold Corporation Basell Canada Inc. The Bay Bayer Inc. Bekaert Canada Benleler Automotive Big Lots Canada, Inc. Blue Mountain Resorts Limited BoeMnger lngelhelm (Canada} Lid. Bombardier Inc. Bonduelle North America Inc. Brink's Canada Limited Bristol-Myers Squibb Canada Co. Broan-NuTona Canada Inc. Bruce Power L.P. Buckman Laboratories of Canada Lid. CGGVarlles CHC Helicopter CKF Inc. CNH America, LLC. Cabot Canada Lid. Campbell Company of Canada Canada Safeway Umitad Canadelle Inc.

Canadian Forasl Produc1s Ltd. Canadian National Railway Company Canexus CorporaUon Canfor Pulp Limited Partnarshlp CannAmm OCcupational TesUng Services Canpolex Limited Capgeminl Canada Capltal Power Corporation Ca11JIII Limited Catalyst Papar Corporation Caterpillar of Canada CorporaUon Caterpillar Tunneling Canada Corpora lion Chemtrada Logistics Chamtura Canada Co Cia ChrlsUO Digital Systems Inc. Chubb Edwards The Churchill CorporaUon Co-op Atlantic Compass Group Canada Conlinentel Tlra Canada, Inc. Country Ribbon Inc. Cytec Canada Inc. Danfoss Inc. De Beers Canada Inc., Corporate Division De Beers Canada Inc., Exploration Division De Beers Canada Inc., Mining Division Deeley Harley-Davidson Canada Detour Gold Corporation Dominion Diamond CorporaUon- EkaU Diamond Mine Dow Chemical Canada Inc. Dr Pepper Snapple Group Dr. Oetkerlld. E.l. du Pont Canada Company EMD Serono Canada Inc. EWOS Canada Ltd. Eden Valley Poultry Inc. Ell Lilly Canada Inc. Esser SIBel Algoma Inc. FMC of Canada, Lid. FIMing (Canada) Flnnlng lrrtemallonallnc. Fisher & Paykel Appliances GDF SUEZ Energy North America, Inc. Gap (Canada} Inc. General Kinetics Engineering Corporalion Glatfelter GlaxoSmithKIIne Inc. Goldcorp Inc. GolrTawn Grand & Toy Griffith Laboratories Limited Group SEB Canada Inc. Henkel Canada Corporation Henry Schein Canada Hoffmann-La Roche Lid. Hofclm (Canada) Inc. Home Outfitters HudBay Minerals Inc. Hudson's Bay Company HumanWara Huntsr Dickinson Inc. Hunlsman Potyurelhana INVISTA (Canada} Company lnlerqulsa Canada Janssen Inc. John Deere Limited Canada

October 2, 2013 Page 3 of4

---------------- - - - -

- --- -


Mr. Ear1 Ludlow Newfoundland Power

Appendix A- 2013 Commercial Industrial Market (n=260) (canrct)

Johnson MaHhey Ltd. K+S Potash Canada KGHM lntarnaUonBI Ltd. KPMGMSLP Kellogg Canada Inc. Kemlra Chemicals Canada Inc. Kennametal Ltd. Klmberty-Cialit CorporaUon Kinross Gold CorporaUon Kongsberg Automotive Kruger Products LANXESS Inc. Labatt Braweries of Canada Lake Shore Gold Corp. LanUc Inc. LanUc Inc. -Rogel!! Sugar Division Lehigh Hanson Materials Limited LeoPhanna LifaLabs Llnamar Liquor Stores GP Inc. Lobtaw Companies Umlled Lowe's Companies Canada, ULC MacoPhanna Canada Inc. Malnsln!am Canada Ltd. Marina Harvest Canada McConnick Canada Co. McEihanney Consulting Services Ltd. The McEihanney Group Ltd. McEihannay Land Surveys Ltd. Melhanax CorporeUon Michelin North America (Canada) Inc. Millar Western Forest Products Ltd. The Minto Group Mission Group Enterprises Mitsublshl Canada Limited Montship Inc. Morneau ShapeD Inc. The Mosaic Company Navtech Systems Support Inc. Neovia Loglslics Services Nlke Canada Corp. Noralta Lodge Lid. North American Palladium Lid. Novams PhannacauUcals Canada Inc. Novo Nordisk Canada Nutreco Canada Inc. OEM Remanufacturing Occidental Chemical CorporaUon L'On!tal Canada Inc. Ovarwaltaa Food Group LP PPG Canada Inc. PPG Canada Inc. -Industrial Coatings Division PPG Canada Inc. - Performance Glazing Division Pan American Sliver Corporation Penske Truck Leasing PepsiCo Canada Phannasciance Inc. Pioneer HI-S red Limited Po lash ColporaUon of Saskatcllewan Inc. Prexeir Canada Inc. Primex Manufacturing Lid. Procter & Gamble Inc. Purdue Pharma

Randstad Canada Rlchemont Canada Inc. Rio Tin to- Dlavlk Diamond Minas Rio TiniD Iron Ore Rogers Communications Inc. Rolls-Royce Canada Ltd. Rothmans, Benson & Hedges Inc. Russel Metals Inc. SEMAFOinc. SMS Equipment Inc. SNC.U.velin Group Inc. Sandoz Canada Inc. sanoH canada Inc Seed Hawk Inc. The Shaw Group Limited Sherrill Coal Sherritt lnlernaHonal Corporation Shoppelll Drug Mart Corporation Shore Gold Inc. Shred-ltlntemational Sldal Canada Inc. Siemens Canada Limited Slka Canada Inc. Sliver Standard Resources Inc. Sknltting Sleeman Breweries Ltd. 5oci6t6 en Commandite Taflsa Canada Inc. Soflna Foods Inc. Sonooo Canada Corporation Strathcona Paper LP Sultran Ltd. Suncor Energy Inc. TELUS CommunlcaHons Inc. TVI Pacific, Inc. Takeda Canada Inc. Tala Global Beverages Canada Technlp Canada Ltd. Tack Resources Limited Tack Resources Limited - Highland Valley Copper Tack Resources Limited- Trail Operation Taekay CorporaHon Tembeclnc. Teranet Inc. Thales Canada Inc. Thompson Creek Metals Company TlmberWasl F0111sl Corp. Tolko lndusbies Ltd. TomTom lnlemaUonal Toromonl CAT, A Division ofToromont Industries Ltd. Tolal E&P Canada Toys "R" Us (Canada) Lid. Ultramar Lt.6e unlPHARM Wholesale Drugs Ltd. Uranium One Inc. Vala Canada Ltd Vallourec Tubes Canada Inc. Viterra Inc. Wai-Mart Canada Corp. Wescast tndusbies Inc. Wast Fraser Timber Co. Ltd. Winners Merchants lntarnational L.P. Xstrata Copper Canada Xstrata Nickal Canada Xstrata Zinc Canada

October 2, 2013 Page 4of4


July 10, 2014

Mr. Earl Ludlow President & Chief Executive Officer Newfoundland Power P. 0. Box 8910 55 Kenmount Road St. John's. Newfoundland AlB 3P6

Dear Mr. Ludlow:

Re: Executive Compensation- President & CEO Newfoundland Power


tel +1.416.868.1371 fax +1.416.868.6871

www.haygroup.com/ca

I am pleased to confirm our evaluation of the President & CEO job at Newfoundland Power: GIV3 800 G4(66) 528 G4P 800 = 2128

Further to Newfoundland Power's executive compensation practice, we attach to this letter a summary of market data and proposed salary positioning. We also confirm the Canadian commercial industrial median for base salary is $348,500.

1 trust this letter provides the information required. If you have any questions, please do not hesitate to call.

Yours truly, Hay Group Limited

~ll

Bill Greenfield Senior Consultant

cc: Barry Perry- Fortis Inc. Christopher Chen - Hay Group Limited

Page 1

CA

-NP

-199, Attachm

ent A

Page 17 of 36

·--~® ---- - - ·-

President & CEO, Newfoundland Power

Target Compensation1

Hay Point s Base Salar/ sn (as% base) Total Cash l n (as% base)3 Total Direct -

95% Salary 21l8 $331,100

Prnsidenl & CEO, Newfoundland Compa-ratlo 40% $1~63,600 50% $62.9,100

Power 9D%.S.alarv Compa~~iitto · ~.its ssBjoo liO% $:439jOO 50% SS9G;ooo

Notes: 1. Data represents 95% or 90% compa-ratios from market median sa Ia ry 2.Target incentive compensation values (short-term incentive, stock options, and Performance Share Units ("PSUs")) are based on post-reorganization Hay Points value 3. Includes stock options and PSUs. A valuation factor oflO% has been applied to the target stock option grant values 4. Market data are as of December 2013 and presented In $CAD

Page2


l_~~-

October 8, 2014

Mr. Gary Smith President & Chief Executive Officer Newfoundland Power P.O. Box 8910 55 Kenmount Road St. John's, Newfoundland AlB 3P6

Dear Mr. Smith:


tel +1.416.666.1371 fax +1 .668.21 0.6976

www.haygroup.com/ca

Re: Executive Compensation -Vice President, Engineering and Operations

I am pleased to confirm our evaluation ofthe Vice President, Engineering and Operations at Newfoundland Power:

FIII3 608 F4(57) 350 F4P 608 = 1566

Further to Newfoundland Power's executive compensation practice, we attach to this letter a summary of market data and proposed salary positioning. We also confinn the Canadian commercial industrial median for base salary is $247,600.

I trust this letter provides the information required. If you have any questions, please do not hesitate to call.

Yours truly, Hay Group Limited

~~~~d

Bill Greenfield Senior Consultant

cc: Earl Ludlow- Fortis Inc. Christopher Chen - Hay Group Limited

1/2

CA

-NP

-199, Attachm

ent A

Page 19 of 36

Vice President, Engineering and Operations 1566 Hay Points

----- ------ .. . ----------- ----HayGroup~

Target Compensation 2

Hay Points Base Salary1 STI (as% base)3 Total Cash LTI (as% base)3•4 Total Direct

-

-: VlCejPfesrae-ot;, 90% Salary 1566 $222,800 35% $300,800 25% $356,500 . __ .. ,_\_ ~·::. •.• , '-·r-,. -~~,- .... Compa-rati

rengineerl~)g and i 85% Sa lory .-'TO' "£fr.ati.6nts .. · · 1566 $2:1.0,400 35% $2.84,100 25% $336,700 l ·~- P-................... Compa~rotia_ 1=------'--- --.=.::--

Notes: 1. Data represents 90% or 85% compa-ratios from market median salary. 2. Target incentive compensation values (short-term incentive, stock options, and Performance Share Units ("PSUs")) are based on Hay Points. 3. Includes only those organizations which have a plan at this level. 4. Includes stock options and PSUs for Newfoundland Power. A valuation factor of 10% has been applied to the target stock option grant values. 5. Market data are as of December 2013 and presented in $CAD.

212


NEWFOlJNDI.AND~- - -

POWER A FORTIS COM-NY

February 16, 2015

Mr. Gary Smith President and Chief Executive Officer Newfoundland Power 55 Kenmount Road P.O. Box 8910 St. John's, NL AlB 3P6

Dear Mr. Smith,

~ HayGroup~ ~- -- ---~-----

Hay Group Limited 121 King Street West Suite 700 Toronto, ON M5H 3X7 canada

tel +1.416.868.1371 fax +1.416.868.6871

www.haygroup.com/ca

Re: Executive Compensation- 2015 Estimated Market Actual Salary Median



Table 1, on the following page, illustrates the estimated 2015 market actual salary medians (Column 7) for Newfoundland Power. This represents 2014 market actual salary data (Column 6) adjusted upwards by 2.6%, based on data collected between July and August 2014 for the purpose of estimating 2015 salary increases.


Table 1- Estimated Newfoundland Power 2015 Executive Market Actual Salary Medians

- I Estllnai.eci llll-1 Nc•,,1fJillll1lo\110 I I M;;rk>:?l Actuiil l"uv.'t!r 201-1 <'01·~ Ma ll<<' I f:5hmi11ed 21115 I CllrtOnl !;~!;yry Msdi;m 1\ttusl sa~'! ktu;;l Sa:nr~· t.l~·~~· A:;tual

Pt~5JIJOII rm: un'lil~n l l [F..., .. h,~IIIJfl il11 ~l;J1JJ Solan./ M~dla!'l Slill\fy r.I•Jtltan

[11 !2! I l3l 1-11 151 ! [7 1

~: ~..& ~Eo ~$1'1) ,2"1;(!? om · 01) 1

; Engineering end Operallons G. t.llrray 1628 . 2

·~(it~·~~.f~ Cilf\lP.I!t ~MCI ·\i'P , ~

J.P'i!f~J ~ ~~ ~t~

\IP. Regulation and Planning P.S. Aileen 1560 $247,100

-,, - ~100 on rlrNout: roe as w ~iJllliX!l Q~llndsA·t~ng, ev

2. New role /Incumbent



Christopher A. Chen, LLB National Director

$mJOil ~.000 S$9,\00

$210,000 $259,300 $266,000

~ ~f~ FJT;jiOO

$251,300 $257,800

February16,2015 • Page2of4


~~ ~- __ · ------------

Appendix A- 2014 Commercial Industrial Market (n::::268)

3M Canada Company A&W Food Services of Canada 1.-.;. ALS Canada Lid. AMEC Amerlcss Limited ATCOI-Tek AV Nackawic Inc. Abbott Laboratories, Limited Agrlumlnc. Ainsworth Englneellld Canada L P. Air New Zealand Air Producb Canada Lid. Alamos Gold Inc. Alberta Newsprint Company Alberta-Pacific Forest Industries Inc. Alcon Canada Inc. AllaSteel Lld. Amcor Limited Amgen Canada Inc. Amway Canada Co/polation Andnrw Peller Limited ArcelorMittal- Bafflnland Iron Mines Corporation ArcelorMittal Canada ArcelorMittal Canada Contrecoaur-Ouast Inc. ArcelorMIIIal Canada Hamilton ArcelorMitlal Canada Longeuil ArcelorMitlal Canada Saint-Patrick ArcelorMittal Dofasco Inc. ArcelorMittal Mines Canada ArcelorMittal Tubular Products - Autornotiw DMslon An:her-Oanlels-Midland Company (Canada) Lid. Al1a Foods Inc. Ashland Inc. Ashland Inc. - Perfonnance Matarlals Ashland Inc. • Specialty lngllldlan13 Ashland Inc. • Valvollne Ashland Inc.- WatarTechnologies Astallas Pharma Canada Inc. AslrBZeneca Canada Inc. AUantic Packaging Products Lld. Atotech Canada Ltd. BASF Canada Inc. SHP Bllliton Canada Inc. BIC Graphic Canada Babcock & Wilcox Canada Lid. Barilla Barrick Gold Corporation Basalt Canada Inc. Baxter Corporation The Bay Bayer Inc. Bekaert Canada BEL Group Belden (Canada) Inc. Bericap North America Inc. Blue Mountain Resorts Limited Boehringer lngelhelm (Canada) Ltd. Bombardier Inc. Bondualla North America Inc. Booklng.com B.V. Bristol-Myers Squibb Canada Co. Broan-NuTone Canada Inc. Bruce Power L.P. CAE Inc. CEPSA Qulmica Monwal L.P. CGGVeritas CHEP Canada Inc. CKFinc. CNH America, LLC. CSL Silicones Inc. Cabot Canada Lid. Campbell Company of Canada Canada Goose Inc.

Canada Sefaway Limited Canadelle Inc. Canadian Forest Products Lld. Canadian National Railway Company Canadian Tire CoiJl()lllllon Canfor Pulp Umited Partnership Canpotex Limited Capgemlnl Canada Capstone Mining CoJP. CargUI Umited Cataly51 Paper Corporation Catarpillar of Canada CorporaHon Caterpillar Tunneling Canada Corpora lion Centerra Gold Inc. Cennaq Canada Certain Teed Gypsum North American Servioes Christie Digital Systems Inc. Chubb Edwards Cliffs Nalllral Resoun:es Inc. Compass Group Canada Compass Minerals lntemaUonal, Inc. Continental Tire Canada, Inc. CotyCanada Country Ribbon Inc, Cytec Canada Inc. DOF Subsea Canada OSM Nutrf1ional Products Canada Inc. Danfoss Inc. De Beers Canada Inc., Corporate Division De Beers Canada Inc., Exploration Division De Beers canada Inc., Mining Division Deeley Harley-Davidson Canada DeiDur Gold Corpora~on Dominion Diamond Corporation - Eke~ Diamond Mine Dorman Products Inc. Dow Chemical Canada Inc. E & J Gallo Winery E.l. du Pont canada Company EMD Seruno canada Inc. Eden Valley Poultry Inc. Edmonton Eskimo Football Club Ell Ully Canada Inc. Elllon Turbomachinery Canada, Inc. Enbrtdge Inc. Esser Steel Algoma Inc. Ferrero Canada Umlted Comme~ial Division Rnn!ng (Canada) Flnning lntarnallonallnc. First Majestic Silver Corp. Asher & Paykel Appliances Fisher & Paykel Healll'alra Inc. FlowserYS Canada Inc. Auor Canada Lid. Fortune Minerals Limited GDF SUEZ Energy NOf1h Amer1ca, Inc. GE canada Gap (Canada) Inc. General Kinetics Engineering Corpomtlon General Shale Brick, Inc. Geodls Wilson Cenada Lld. George WesiDn Llmlled Gerdau Long Steel North America GlaxoSmithKiine Inc. Glencora Canada Corporation - Copper Glencora Canada Corporation - Nickel Glencora Canada Corpora don- Zinc Goldcorp Inc. Henkel Canada Corporation Henry Schein Canada Hewitt Equipement Limit6e Hoffmann-la Rocha Lid. Holclm (Canada) Inc.

February 16,2015


Appendix A- 2014 Commercial Industrial Market (n=268) (conrd)

The Home Depot canada Home Outfitters HudBay Minerals Inc. Hudson's Bay Company Hunter Dickinson Inc. Huntsman Polyumlhane IKEACanada lnformalion Services Corporation of Saskatchewan JYSKCANADA Janssen Inc. John Deem Limited canada Johnson Matthey Lid. K+S Potash canada KGHM lnternalional Ltd. KPMGMSLP Kellogg canada Inc. Kennametal Ltd. Kimberly-Clark Corporation Kinross Gold Corporation Knauf Insulation Ltd. LANXESS Inc. La ball Breweries of Canada Lafarge canada Inc. Lake Shora Gold Corp. Lantic Inc. Lehigh Hanson Matarlals Limited Leo Pharma LifeLabs Unamar Luxotlica Group Magotteaux Ltee Marine Harwst canada Mary Kay, Inc. McEihanney Consul1lng SeiVIces Ltd. The McEihaMey Group lld. McEihanney land Surveys Lld. Melhanex Corporation Michelin Norlh America (Canada) Inc. MindGeek Holding SARL Mission Group Enterprises Mitsublshl Cenade Limited Montshfp Inc. Morneau Shepelllnc. The Mosaic Company Navtech Systems Support Inc. Newmont Mining Corporation ol Canada Limited Nlke Canada Corp. North American Palladium Ltd. Novartls Pharmaceuticals canada Inc. Novo Nordlsk Canada Nutr9co Canada Inc. Occidental Chemical Corporation L'Or6al Canada Inc. Orfca Cenada Inc. P & H Mine Pro SaiVIces PPG Canada Inc. PPG Canada Inc. - Industrial Coatings Division PPG Canada Inc. - Performance Glazing Division Pan American Sliver Corporation Penske Truck Leasing PepsiCo Cenada Phannasclence Inc. Pirelll Tims - canada Plastlllex canada Inc. Potash Corporation of Saskatchewan Inc. P11001lr canada Inc. Precision Drilling Oilfield Services Corporation Prlmex Manufacturing Lld. Procter & Gamb1e Inc. Purdue Pharma Randstad canada

Richemont canada Inc. Rio Tlnto - Diavik Diamond MlnB!I Rio Tin to - Fer et Titans Inc. Rio Tlnto Iron Om Rogers Communications Inc. Rolhrnans, Benson & Hedges Inc. Russel Metals Inc. SABIC Innovative Plastics Cenada Incorporated SEMAFOinc. SMS Equipment Inc. Safnl-Gobaln Abrasives Canada Inc. Salnt-Gobain Cammie Materials canada/Abrasive Materials Sandoz Canada Inc. Schneider Electric Schwaftzer Engineering LabomtoriB!I The Shaw Group Limited Sharrilt International Corporation Shoppers Drug Mart Corporation Shora Gold Inc. Shnld-lt International Stamens Canada Limited Sliver Standard Resoun:es Inc. Skralting Sleeman Breweries Ltd. Socie" en Commandite Tafl&a Canada Inc. Softna Foods Inc. Solar Turblnas Incorporated Solvay North America Sonoco canada Corporation Staples Business Depot SU!lwater Mining Company Strathcona Paper LP StyruluUon canada UmHed Suncor Energy Inc. TELUS Communlcalions Inc. lVI Pacific, Inc. Takeda Canada Inc. Target Corporation Taro Pharmaceuticals Inc. Tala Global Beverages Canada Tech Data Cenada Corporation Teck Resoun::es Limited Teck Resoun::es limited- Highland Valley Copper Teck Resoun::es limited- Trail Operetion Teeksy Corpo!ation Tembeclnc. Teranet Inc. Taw canada Limited Thales Canada Inc. Tim Hortons Inc. Tolko Industries Lld. Toromont CAT, A Division of Toromont Industries Lid. Total E&P Canada Umlc0111 Canada Inc. uniPHARM Wholesale Drugs Ltd. Urenium One Inc. Vecon canada Vale Canada Limited Valero Energy Inc. Vitena Inc. Votorantim Cement North America WD-40 Products canada Ltd. W.E. T. Automotive Systems Ltd. Wei-Mart Canada Corp. Wescast Industries Inc. West Fraser Timber Co. Lid. Weslmol8!end Coat Company - canada Winners Merchants International LP. Yarnana Gold Inc. Yara Belle Plaine Inc. Zale Corporalion

February 16, 2015

---- - --- -

Page 4 of4


NEWFOUNDLAND;;:;:::~

POWER A FORTIS COMI¥>-NV

February 16,2015

Mr. Gary Smith President and Chief Executive Officer Newfoundland Power 55 Kenmount Road P.O. Box 8910 St. Jolm's, NL AlB 3P6

Dear Mr. Smith,

RE: Executive compensation program updates


tel +1.416.868.1371 tax: + 1.416.868.6871

www.haygroup.comlca

As part of the executive compensation review conducted in 2014, Hay Group Ltd. ("Hay Group") reviewed your current executive compensation practices and conducted an extensive compensation benchmarking for your executives. This letter provides an overview and illustration of the proposed amendments, effective January 1, 2015.

The 2014 review was conducted to ensure Newfoundland Power's ongoing alignment with the key purposes of its executive compensation program, specifically to:

• Motivate executives to deliver strong business performance; • Attract and retain highly qualified executives; • Align the interests of executives and stakeholders; • Ensure that a significant portion of executive compensation is dependent upon individual and

corporate performance; • Balance executive compensation paid for short-term, medium-term and long-term results; • Mitigate any potential risks inherent in the compensation structure; and • Keep the executive compensation program simple to communicate and administer.

As a component of this review, compensation benchmarking was conducted for all of Newfoundland Power's executives. Findings from this benchmarking indicated the presence of a gap to your targeted median positioning against the Canadian commercial industrial market. To address this compensation gap and reinforce the Corporation's dedication to building a strong pay for performance culture, a number of changes to your executive compensation practices are proposed. Key changes (discussed in greater detail to follow) include:

• The adjustment of short-tenn incentive ("STI") targets; • Changes to long-term incentive ("L Tl") program; and • Changes to Fortis' share ownership guideline policy.

www. haygroup.com/ca


l~HayGroup· -----

1. 2015 Salary Increases

We note that individual executives' base salary adjustment will be determined on a case-by-case basis with reference to the Corporation's compa-ratio guidelines. Specifically, progression beyond 110% compa-ratio to a maximum of 115% will have to be approved on an individual case basis by your Board of Directors.

In order to highlight the proposed changes in incentive compensation and for comparison purposes, we have assumed an across the board salary increase of2.6%, effective January 1, 2015, for your executives. This projected increase reflects market forecasts collected between July and August 2014 for the purpose of estimating 2015 salary increases.

The projected impact of base salary and incentive compensation changes on an individual basis has been modeled and presented in the appendix to this document. Modeling has been conducted for target total direct compensation (i.e., base salary+ STI + LTI).

2. Adjustment of STI Targets

In addressing the identified gaps to market compensation, each compensation component was evaluated relative to the market independently and in aggregate to determine appropriate adjustments. While the most significant changes have been made to LTI compensation in order to further drive focus on sustained corporate performance, STI targets have also been changed to better align with market practices.

Former and 2015 STI target opportunities are as presented in Table 1 below. Executives remain eligible to earn up to 150% of these targets for consistent superior performance. An additional payment of up to 50% of the STI target opportunities may be awarded at the Board's discretion in recognition of individual responses to exceptional challenges or opportunities.

Table 1 -Short-term Incentive Targets as a % of Base Salary =

Pu~ilinn lin~· l'oiu ts Formrr l'o-iltion Hus l'oints 1015" --- - --- - - -

1,801 - 2,400 50 1 ,601 - 2,400 40

1,500-1,800 40 1,500 - 1600 35

1,201 - 1,499 30 1,201-1,499 35

1,001-1,200 25 1,001- 1,200 30

I

www.haygroup.com/ca


3. Changes to LTI Program

As previously mentioned, the most significant changes are in the LTI program, including adjustments made to target grant opportunity, the addition ofRestricted Share Units {"RSUs"), changes to Performance Share Unit ("PSU") metrics, and a change in the methodology by which grant recommendations are made.

3.1 Grant Levels and Target Compensatio11 Values

Previously, executives were eligible for both stock options and PSUs. Each program had separate grant levels with specific Hay Points ranges. These grant levels were detennined within the context of total compensation, along with base salary and STI.

It was proposed to alter this practice to instead base L TI awards on a pre-determined Target L TI Compensation Value for the full L Tl package, allocated between L TI components in fixed proportions. This new allocation methodology provides for better control of L TI compensation value, irrespective of fluctuations in Fortis' share price or stock option valuation factor.

Target LTI Compensation Values have been proposed for the executive roles following the 2014 review. However, it was deemed prudent to phase in LTI increases over multiple years. As such, target LTI values have been spread over 20 15 and 20 16, with planned increases to be reviewed for 2016 grants, subject to the final decision ofthe Board of Directors.

I#TI alu:ulrua 1\fl'ltaodnlogy:

•Bli:h rn ~mYlJIP~$111 IJ s oH.Ji'£rUrtnt OlOIIitid1b) wiUr:h·~P.~TJ~IiPn Vtlh,n:: is ~Jli.kuhuecl. A~c<?mj)erlll:EIIiuh \'llltll:, ln e~c11te ~!;Jitnnli::..,.Qtl' !uuiit va]ue-tinhc: b~tJll thttr ~~n qero~li~p by tba c~e:cnu.ve tmd dL<c:ount~

tlru.IUUL\Unllilltlh tl' l l~t-gr.am dtile. wh1Ch ull"~'t.'i fi1r cq.ihtablc l;(}lll~T\!KJuh.c•w~tcdtffl!rctnl t~..;-~fLTI

oomp{l~nt-.

' Sigds npriQII'i • Compel sa_dQI~ vulue.codD!IJDr~ b$sed.,pn:a .vntumron

•

•

3

(u~Qr dete.ultin~d IJ..oo.:mg the·Binck- eoheiCl$ ('It Binonunt Vtiflindon (JlCill~ls. On-der past prtlctil.~e_ gtnnt Ie\le!S \!.!.tire C:.lt!JrnS~td $ b % ofbn~~e Sll.lllry. \vilh the llllnll:iet 0~(1ptfan'*hfqm¢a

c.altmlated bnsed nn: r~lnry J(mru lav~l) , Fottl."'· h~ pnce Wt'fdll~ tlew P-mL.tl£!~. t~(gct c'On~tU,n \1tl~"" ~~~ e~pr~-:ed as il !K (lfluJ~e'tiurat)'. w lli the number of O,PiiQI\~ ~t\.!d d!IO\Ifared bn~ t u , (i&larv T11r.g_e1 U'l CPinJlbn..'l.l;l,t~ Vnhle· \Vel~rti"·>;toukr~p lbJ\:1.) (.al!l k-S't.hnlcS"flr Btctomitil vn.l.lk ... of.Fnrti.~ 'ilmre pn~)

P w.~~ &SUs

•

•

•

Coml>ebsaUon. "'Pille ct~Lclilnl !d bnsed on ii Vtllutilion. .tac: r.oft~f I ruulh~Ht;.:tl ll. Fori'fq sh'~ pd~

Undj~n~fi.)'fl:~k~ •. P~lJ um;:$ \'f-al\: ~OWMiSbJ M a ·>~p of br.isc Mlll lly} " il'tb tfi~: mu£i~r lif..P lJ"'-gr.l!l.tctl.calcUlnted b~ ru ltiil rllt'Y w m l~yeJ) 1 Fo . ~~ ~hutc rnic !Jndernc" -p~lftOe. target gru:npen..;ati(}.n. vnl\o!e 1U'CJ..lD1c:Ul!lfeci:~a$ld (}11:~ (~ary ~ · ll:Wi!I'~PlllPe.Q~tlon Vahu: x weJgb~.

ClfP"'R Ills) t fil[ll.~ $n.rc pnce

www.haygroup.com/ca


Changes to Target LTI Values .for 2015 are presented in Table 2:

Table 2 -Long-term Incentive Targets as a % of Base Salar)'

~ ''""'" I ~no;,. ·'""'.'""''' ,~ 2015 l 11\I - IRI • II I ~

2,001 - 2,400 300 30 20

1 ,801 - 2,000 150 15 20

1 ,500- 1,800 150 15 iO

1,401- 1,499 I 150 15 10

1,201-1,400 100 10 10

1,101-1,200 100 10 10

1,000-1 ,100 100 10 0 I. Assumes a Bmmmal valuation factor of I 0% for Fort1s stock optioru. 2. Rctlccts sum of stock option and PSU grants

3.2 LTI Compone11ts

50 75

35 60

25 40

25 35

20 30

20 30

10 25

Commencing in 2015, executives will be eligible to receive RSUs in addition to the stock options and PSUs that were granted in previous years. This balanced portfolio ofLTI components will ensure ongoing alignment with the organization's long-tenn goals and reward executives for strong and sustained operational perfonnance.

The new RSU plan functions similarly to the PSU plan, with the exception that there are no perfonnance criteria for vesting at the end of the 3-year vesting period other than continued employment.

Table 3 -High-level Summary of LTI Components

I I'SCs l(SlJs l Srock oplion~

Weighting 50% 25% 25% Value derived from full value of share at time of

Value derived from full Value derived from

Detail vesting; number of PSUs value of share at time of share price appreciation

vesting may change vesting

from time of grant to based on perfom1ance on time of exercise

metrics Determined based on

Compensation Based on market share Based on market share Black-Scholes or value pnce price Binomial valuation

models Vesting

Perfonnance Time Time requirements

4 www.haygroup.com/ca


3.3 PSU Metrics

Changes have also been made with regard to the performance metrics under the PSU Plan. Table 4 below summarizes the performance metrics that will be assessed for grants that occurred prior to January 1, 20 15 and those that occurred on or after January 1, 2015.

Table 4 -PSU metrics

l'SL:\ graulnl r·sus gnui~~d prior to .Jnnun r~ · 1. 21115 on or Jtftl!r ·.JruliuiryJ , 21115

Metric W~tng M~ti~ Wt:ighti1J8 Total Shareholder Returns

20% ("TSR") (Fortis Inc.) Compound Annual

TSR (Fortis Inc.) 50%

Growth Rate ("CAGR") 50%

in Earnings per Share ("EPS .. ) (Fortis Inc.)

Cumulative EPS CAGR in Property Plant (Fortis Inc.) 50%

and Equipment ("PP&E") 30% (Fortis Inc.)

No values will be payable if Fortis Inc.'s corporate long-term credit rating is below the median credit rating for comparator organizations

3.4 Sample LTI Ca/culatio11

The following page contains a sample calculation under the previous and current L TI grant methodologies to illustrate the difference in process. This scenario presents a calculation for a sample executive in a role with 1358 Hay Points and a 2014 base salary of$240,000.



----- ---

Sample Executive

2014 Salary Expected Increase 2015 Salary Points Fortis Share Price (Feb 10, 2015): Stock Option Unit Value (Binomial Value): PSU Unit Value: RSU Unit Value:

$240,000 2.6%

$246,300 1358

$40.39 $4.04

$38.8991 $38.8991

$80,000

$60.000

$40,000

$20.000

$0

l_lllwGrouPe

Illustration Only

Target tn Compensation Value

2013 (Formerl Policy 2015 Polity

• Option • PSU • RSU

2013 Stock Optlnn anti PSU Grant Policy · St>pom tE Stoct, Dpflon I PSU Gmnr f'errEntaucs

Grant level #of Options/ Targetlll % of Total Target (%of Shares Compensation Lll Compensation

Salary) Granted Value Value

Stock Option 100% 6,100.00 {l) $24,629.82 (3) 50%

PSU 10% 633.18 (2) $24,630.00 (4) SO%

Total Target lTI Compensation Value S49.259.B2 (5)

Total Target LTI Compensation Value( % of Salary) w% (r,}

zoiS:L Tl P"Oiity __ _ _.=§_inate .T~111e~ L l'/, Com(Jensotion 'Value. nllor:oled rrm ongsi"'P.SU!i, ·nslb ciiJd·Stm:k~ t!pttoiis _ _ -

Tota I Target LTI Conipe~s a tll)h lta-IOe '(9~ of S., I.ai'V)

Total Target LTI Compensation Valtte

PSU

RSU

Stock Option

PSU

RSU

Stock Option

Footnotes: (1) Salary x Stock Option Grant %/Fortis Share Price of$40.39 (2) Salary x PSU Grant%/ PSU Unit Value of $38.8991 (3) #of Options granted x Binomial Value of $4.04 {4) #of PSUs granted x PSU Unit Value of $38.8991 {5) {3) + {4) (6) Total LTI Target Value I 2015Salary (7) 2015 Single LTI Target Value{% of Salary) {B) {7} x 2015 Salary {9) {8) x PSU Weighting (10) (B) x RSU Weighting (11) (8) x Stock Option Weighting (12) {9) / PSU Unit Value of $38.8991 (13) {10) / RSU Unit Value of $38.8991 (14) (11) I Binomial Value of $4.04, (reference only)

6

#of Options/ Shares

Granted

949.76

474.88

4,574.00

Target Ll1 "ofTotal Target Compensation Lll Compensation

Value Value

30% J

$73,890.00 ... ;, $36,945.00 (9) 50%

$18,472.50 (lO) 25%

$18,472.50 (11) 25%

{11)

{13)

(14}

www.haygroup com/ca


I_~·

3.5 LTJ Awards for Non-Executive Employees with Positions Rated above 1,000 Hay Points

Effective January 1, 2015, stock options will no longer be granted to employees below the executive level on an annual basis. Select employees who were granted stock options in 2014 will receive an equivalent award ofPSUs, calculated at 5% of the employee's base salary for 2015.

J. Pna ,·oh.un~ "·\.· if!l~..,tJlY~

2. ("~nsatim ,·ab: based on a Binonliill vellation factor of 10.00"/o.

L TI awards for non-executive employees are discretionary and subject to review by the Corporation from time to time.

4. Share Ownership Guidelines

Previously, executives holding positions evaluated above 2,000 Hay Points were required to own a minimum number of Fortis shares. However, all executives who were eligible for stock option grants were encouraged to hold common shares. Prior to January 1, 2015, for executives who had been granted options for 5 years or more, the maximum number of options granted in a given year to the executive would be limited by the number of shares held by the executive since the beginning of the previous calendar year. This stock option grant limit policy will cease with the adoption of the new Share Ownership Policy.

Effective January 1, 2015, all executives are required to beneficially own, directly or indirectly. a minimum number of Fortis shares based on position and level. The share ownership guidelines include the following details, with required multiples outlined in Table 5 below:

• This value is expressed as a multiple of base salary; • The number of RSUs held by the executive will be included in shareholdings; • Minimum share ownership must be achieved within 5 years of appointment to an eligible position; • Executives will be generally expected to make regular and consistent progress toward achieving

the minimum position over the 5 year period between applicability and required compliance; • Ownership levels will be calculated annually on each December 31; • In circumstances where the Share Ownership Policy would place hardship on an executive, the

applicable executive may submit a request in writing to the Fortis Inc. CEO summarizing the particular circumstances and the extent to which an exemption is requested. A final decision will be made by the Fortis Inc. CEO, in consultation with the Chair of the Fortis Human Resources Committee, as to an alternative share ownership plan for the executive that may be applicable; and

• Any executive that fails to comply with the Share Ownership Requirements will not be eligible for future equity-based compensation awards until the later of (i) the end of the one-year period commencing on the date of such failure or (ii) such time as the executive is again in compliance with the Share Ownership Policy.



Table 6 - Share ownership guidelines -

[, . . 2015 Share Ownership OSI{IOIJ •

Requirement

CEOs of subsidiaries 2 times annual base salary

All other executives l time annual base salary

I trust that this overview is of assistance to you. Please do not hesitate to contact me if you would like to discuss the contents of this memo.




CA

-NP

-199, Attachm

ent A

Page 32 of 36

Appendix- Projected Impact of Compensation Changes

Bas<! Salary 20'1 5 Compensation (2013 Policy)

Targc!l Stock Slocll LTI

2015 STI Tar~wt Opuons Ootion

PSUs Vl]!ue 201·1 :~~~ of Tolill IComp ;%Ill Pro;ecwa

t:iow Cash I,G,~r.~ !V:lmp V:!:ue.; Sa:;;

Sntlaf't:· Le ·Ji!l,l V;;l~l

S:;'sry)

Newfoundland Power

Gary Smith 331,100 339,800 40% 475,700 300% 30% 20% 50%

Gary Murray 210,000 215,500 40% 301,700 150% 15% 10% 25%

Jocelyn Perry 262,000 268,900 35% 363,000 150% 15% 10% 25%

Peter Alteen 262,000 268,900 35% 363,000 150% 15% 10% 25%

• Assumes 2.6% salary increase

Targal To!.;} I

Dtrect

645,600

355,600

430,200

430,200

2015 Compen sation 12015 Polley)

Targel 1.1'1 STI

('Y! o f

8 3 S£'

Sala :

50%

40%

40%

40%

Targe;l To!al Cash

509,700

301,700

376,500

376,500

Vall.€ :'";.i at

Eane ~. I

75%

40%

40%

40%

'f arge t Tot~ I

D'rst:t

764,600

387,900

484,100

484,100

HayGroup

Target Tota l Direct 201 5 Vs. 2013 l~ollr.y

V;~nance

18%

9%

13%

13%

Overall lncr.:asa

119,000

32,300

53,900

53,900

Ove-rall

• 35%

15%

20%

20%



NEWFOUNDLAND~

POWER A FO RTIS COMPANY

February 16, 2015

Mr. Gary Smith President and Chief Executive Officer Newfoundland Power 55 Kenmount Road P.O. Box 8910 St. John's, NL AlB 3P6

Dear Mr. Smith,

~·


tel +1.416.868.1371 fax +1.416.868.6871

www.haygroup.com/ca

Re: Executive Compensation -1015 Estimated Market Actual Salary Median



Table 1, on the following page, illustrates the estimated 2015 market actual salary medians (Column 7) for Newfoundland Power. This represents 2014 market actual salary data (Column 6) adjusted upwards by 2.6%, based on data collected between July and August 2014 for the purpose of estimating 2015 salary increases.

Pa e 1 of4


I U.mr~-rrl l .A.IGJ'-D. ""!' I. ----

Table 1 -Estimated Newfoundland Power 2015 Executive Market Actual Salary Medians

< '" """ d 20 1< : No o!o""'""" I Marne I Al:tuJl Pow(tr 2014 ~0111 Markel ET;Im'i31Gd 2D15

Currem Salary Medl:i11 Al:luill B.:se l..chul Slllllry Ma~ka l ~u!ll

Poslhon lncumbenl Ev.:llunt•ou (In 2013l Salary Mmlian Sal :try Madt4ln (11 121 [Jl (t.J [5] [fl.] [71

Presrdent & CEO G. Smith 2128 $268,700 I $331.100 $350.000 $359.100

VP. Engineering and Operations G.. MJrray 1628 • 2 $210.000 $259,300 $266,000

Chref Financial Officer and VP. J. Peny 1560 $247.100 $262.000 $251,300 $257.800 Finance '

VP. Regulation and Planning P.S. Meen 1560 ~7.100 $262,000 $251,300 $257,800 .

1. rvlarkel data based on~ [tEas VP Custome; OpiOiaUI)fJll & !;ngmeemg., ellil!WiiBll m 1 7(Hl POlrrt~

2. New role !incumbent




February 16, 2015 Page 2 of4


~~ L -~ - ----

Appendix A - 2014 Commercial Industrial Market (n=268)

3M Canada Company A&W Food Services of Canada Inc. ALS Canada Ltd. AMEC Americas Limited ATCO 1-Tek AV Nackawic Inc. Abbott Laboratories, Limited Agriumlnc. Ainsworth Engineered Canada L. P. Air New Zealand Air Products Canada Ltd. Alamos Gold Inc. Alberta Newsprint Company Alberta-Pacific Forest Industries Inc. Alcon Canada Inc. AltaSteel Ltd. Amcor Limited Amgen Canada Inc. Amway Canada Corporation Andrew Peller Limited ArcelorMittal • Baffinland Iron Mines Corporation ArceforMittal Canada ArceforMittal Canada Contrecoeur-Ouestlnc. ArcelorMittal Canada Hamilton ArcelorMittal Canada Longeuil ArcelorMittat Canada Saint-Patrick ArcelorMittal Dofasco Inc. ArcelorMittal Mines Canada ArcelorMittal Tubular Products • Automotive Divisoon Archer-Daniels-Midland Company (Canada) Ltd. Aria Foods Inc. Ashland Inc. Ashland Inc. - Performance Materials Ashland Inc. • Specialty Ingredients Ashland Inc. • Valvoline Ashland Inc.· Water Technologies Astellas Pharma Canada Inc. AslraZeneca Canada Inc. AUantic Packaging Products Ltd. Atotech Canada Ltd. BASF Canada Inc. BHP Biniton Canada Inc. BIC Graphic Canada Babcock & Wilcox Canada Ltd. Barilla Barrick Gold Corpora lion Basell Canada Inc. Baxter Corporation The Bay Bayer Inc. Bekaert Canada BEL Group Belden (Canada) Inc. Bericap North America Inc. Blue Mountain Resorts Limited Boehringer lngelheim (Canada) Ltd. Bombardier Inc. Bonduelle North America Inc. Booking.com B.V. Bristol-Myers Squibb Canada Co. Broan-NuTone Canada Inc. Bruce Power L.P. CAE Inc. CEPSA Qulmica Montreal L.P. CGGVeritas CHEP Canada Inc. CKFinc. CNH America, LLC. CSL Silicones Inc. Cabot Canada ltd. Campbell Company of Canada Canada Goose Inc,

Canada Safeway Limited Canadella Inc. Canadian Forest Products Ltd. Canadian National Railway Company Canadian Tire Corporation Canfor Pulp Limited Partnership Canpolex Limited Capgemlnl Canada Capstone Mining Corp. Cargill Limited Catalyst Paper Corporation Caterpillar of Canada Corporation Caterpillar Tunneling Canada Corporation Cenlerra Gold Inc. Cermaq Canada Certain Teed Gypsum North American Services Christie Digital Systems Inc. Chubb Edwards Cliffs Natural Resources Inc. Compass Group Canada Compass Minerals International, Inc. Continental Tire Canada, Inc. CotyCanada Country Ribbon Inc. Cytec Canada Inc. DOF Subsea Canada DSM Nutritional Products Canada Inc. Danfoss Inc. De Beers Canada Inc., Corporate Division De Beers Canada Inc .. Exploration Division De Beers Canada Inc., Mining Division Deeley Harley-Davidson Canada Detour Gold Corp01ation Dominion Diamond Corporation - Ekall Diamond Mine Dorman Products Inc. Dow Chemical Canada Inc. E & J Gallo Winery E.l. du Pont Canada Company EMD Sereno Canada Inc. Eden Valley Poultry Inc. Edmonton Esk1mo Football Club Eli Lilly Canada Inc. Ellioll Turbomachinery Canada, Inc. Enbridge Inc. Essar Steel Algoma Inc. Ferrero Canada Limited Commercial Division Finning (Canada) Finning lntemationallnc. F~rst MaJestic Silver Corp. Fisher & Paykel Appliances Fisher & Paykel Heallhcare Inc. Flowserve Canada Inc. Fluor Canada Ltd. Fortune Minerals Limited GDF SUEZ Energy North America, Inc. GE Canada Gap (Canada} Inc. General Kinetics Engineering Corporation General Shale Brick, Inc. Geodls Wilson Canada Ltd. George Weston Umiled Gerdau Long Steel North America GlaxoSmilhKiine Inc. Glencore Canada Corporation - Copper Glencore Canada Corporation - Nickel Glen core Canada Corpora lion -Zinc Gold corp Inc. Henkel Canada Corporation Henry Schein Canada Hewitt Equipement Limitee Hoffmann-La Roche Ltd. Holcim (Canada) Inc.

February 16. 2015 Page 3 of4


I HsyGroup.

Appendix A- 2014 Commercial Industrial Market (n=268) {cont'd)

The Home Depot Canada Home Outfitters HudBay Minerals lne. Hudson's Bay Company Hunter Dickinson Inc. Huntsman Polyurelhane IKEACanada Information Services Corporation of Saskatchewan JYSKCANADA Janssen Inc. John Deere Limited Canada Johnson MaHhey Ltd. K+S Polssh Canada KGHM lntemalional ltd. KPMGMSLP Kellogg Canada Inc. Kennametalltd. Kimberfy-Ciarl< Corporation Kinross Gold Corporation Knauf Insulation ltd. LANXESS Inc. La batt Breweries of Canada Lafarge Canada Inc. lake Shore Gold Corp. lanlic Inc. Lehigh Hanson Materials Limited Leo Pharma Life labs Llnarnar LuxoHica Group Magotteaux Llee Marine Harvest Canada Mary Kay, Inc. McEihanney ConsuWng Services Lid. The McEII\anney Group Lid. McEihanney Land Surveys Ltd. Methanex Corporation Michelin North America (Canada) Inc. MindGeek Holding SARL Mission Group Enterp"ses Mitsublshi Canada Liml!ed Montship Inc. Morneau Shepelllnc. The Mosaic Company Navtech Systems Support Inc. Newmont Mining Corporation of Canada Limited Nike Canada Corp. North American Palladium Ltd. Novartis Pharmaceuticals Canada Inc. Novo Nordisk Canada Nutteco Canada Inc. Occidental Chemical Corporation l'Or~al Canada Inc. Orica Canada Inc. P & H MlnePro Services PPG Canada Inc. PPG Canada Inc. - lnduslrial Coatings Division PPG Canada Inc. - Performance Glazing Division Pan American Silver Corporation Penske Truck Leasing PepsiCo Canada Pharmasclence Inc. Pirelli Tires - Canada Piastiflex Canada Inc. Polash Corporation of Saskatchewan Inc. Praxalr Canada Inc. Precision Drilling Oilfield Services Corporation Primex Manufacturing ltd. Procler & Gamble Inc. Purdue Phanna Randstad Canada

Rlchemont Canada Inc. Rio Tinto - Diavik Diamond Mines Rio Tinto - Fer et Tilane Inc. Rio Tinto Iron Ore Rogers Communications Inc. Rolhmans. Benson & Hedges Inc. Russel Metals Inc. SABIC Innovative Plaslics Canada Incorporated SEMAFOinc. SMS Equipment Inc. Saint-Gobain Abrasives Canada Inc. Salnt-Gobaln Ceramic Materials Canada/Abrasive Materials Sandoz Canada Inc. Schneider Electric Schweitzer Engineering Laboratories The Shaw Group Limited Sherrill International CorporaUon Shoppers Drug Mart Corporation Shore Gold Inc. Shred-illntemational Siemens Canada Limited Silver Slandard Resources Inc. Skretting Sleeman Breweries Ltd. Soci~t6 en Commandite Taflsa Canada Inc. Solina Foods Inc. Solar Turbines Incorporated Solvay North America Sonoco Canada Corporation Slaples Business Depot Stillwater Mining Company Slralhcona Paper LP Styrolution Canada Limited Suncor Energy Inc. TELUS Communicallons Inc. TVI Pacific, Inc. Takeda Canada Inc. Target Corporation Taro Pharmaceuticals Inc. Tala Global Beverages Canada Tech Data Canada Corporation Teck Resources L1m1ted Teck Resources Limited- Highland Valley Copper Teck Resources Limited -Trail Operation Teekay Corporation Tembec Inc. Teranetlnc. Teva Canada Limi ted Thales Canada Inc. Tim Hortons Inc. Tolko Industries Ltd. Toromont CAT, A Division of Toromontlnduslries ltd. Total E&P Canada Umlcore Canada Inc. uniPHARM Wholesale Drugs Ltd. Uranium One Inc. Vacon Canada Vale Canada Limited Valero Energy Inc. Viterra Inc. Votoranlim Cement North America WD.<IO Products Canada Ltd. W.E.T. Automotive Systems ltd. Wai-Mart Canada Corp. Wescast Industries Inc. West Fraser Timber Co. Ltd. Weslrnoreland Coal Company - Canada Winners Merchants lnlemaUonal L.P. Yamana Gold Inc. Yara Belle Plaine Inc. Zale Corporation

February 16, 2015 Page 4 or4

CA-NP-199

Attachment B



Hay Group’s Recommendations for

Newfoundland Power’s Salary Policy for Directors

2012 to 2015

CA-NP-199, Attachment B Page 1 of 22

NEWFOUNDLANo - -~;:: _ .

POWER A FORTIS COMPANY

January 6, 2012


Dear Mr. Ludlow,

Hay Group Limited 121 King Street West Suite700 Toronto, ON M5H 3X7 canada

tel +1.416.868.1371 fax +1.416.868.6871

www.haygroup.com/ca

Re: Manager Compensation- 2012 Estimated Market Actual Salary Median

We have been asked to provide estimated market actual salary levels in 2012 for the management group immediately below the executive level.

Our views are based upon the current evaluation of the roles using the Hay Group job evaluation methodology and compensation information in the Hay Group database accumulated from the Commercial Industrial non-executive market effective May 15

\

2011. The companies included in this sample are listed in Appendix B. We continue to observe some market data volatility at the level of your Manager, Regional. As with previous years, additional market information for the Manager, Regional role has been included in Appendix A.

Table 1, on the following page, illustrates the estimated 2012 market actual salary medians (Column 5) for your managers. This is based on 2011 market actual salary data (Column 4) adjusted upwards by 2.9%, based on data collected between July and August 2011, to estimate 2012 market practice.


Mr. Earl Ludlow January 6, 2012

I HayGroup~

Table 1- Estimated Newfoundland Power 2012 Market Actual Salary Medians

Er.timatc-illOll Marl1et Actual

Current Salary Medi;:m

~osition €valua·nofl [Jn 2.olfl)

aJ [21 [31

•-: I I ·: · ' I

Manager, Regional 1124 $159,800

Manager, Corp or~~ Services 1056 $153,000

Manager, Human Resources & 954 $142,700

Corporate Affairs

Manager, Engineering 954 $142,700

Manager, Operations 954 $142,700

· Manager, Customer Relations & 954 $142,700

Information Services

Manager, Finance 890 $136,100

Manager, Rates & Regulation 890 $136,100





2()11 £stimated 1012

M<!rlccl 1\ctuill Milrl1ct Actual

Sal.i!rv M!!di~o S01 I ~IV M!!dl311

(4] [5]

. .. • • : t I

$156,300 $160,800

$149,200 $153,500

$138,900 $142,900

$138,900 $142,900

$138,900 $142,900

$138,900 $!42,900

$134,300 $138,200

$134,300 $138,200

Page 2 of7


----- -------Mr. Earl ludlow January 6, 2012

Appendix A:

HayGroup~

l_ -·

Manager. Regional Market Comparison

- - --

(omm'i!rCiill (ommNci;;l A\lantic C<Jnada

Industrial lndustr~;;l lndusui<I11

Market [Non-lSo«!c Onlvl IEl\tJ( & NLH1-El>F:(j (~lfE!C & Non-Exec)

2011 Market Act~! S~ry · erllen 5172,000

Estimated 2012 Market Salary Median $160,800 $177,000 $139,500

N()l§:

I. Fur a list (lf industrial organiz.atiuns with jobs in Atlantic Canada, please see Appendix C.

Page 3of7



I HayGroup~

l-··· ·- -------------

Appendix B - Commercial Industrial Comparator Group - Non-Executive (N = 258)

3M Canada Company

A&W Food Services of Canada Inc. ABB Inc. ACA Co-operative Limited

ATCO 1-Tek AV Nackawic Inc.

Abbott Laboratories, Limited Agfa Healthcare Canada Agfa Inc.

Air New Zealand Air Products Canada Ltd.

Aker Chemetlcs Akzo Nobel Canada Inc.

Alamos Gold Inc. Alberta-Pacific Forest Industries Inc.

Alcon Canada Inc. Allergan Canada Inc.

Aluminerie Alouette Inc. Amcor Limited

Amgen Canada Inc.

Amway Canada Corporation Andrew Peller Limited ArcelorMittal Dofasco Inc.

ArcelorMittal Mines Canada

ArcelorMittal Tubular Products- Automotive Division Arrow Transportation Systems Inc.

Ashland Inc. Ashland Inc. - Global Chemicals

Ashland Inc. - Performance Materials

Ashland Inc. - Valvoline Ashland Inc. - Water Technologies

Astellas Pharma Canada Inc. AstraZeneca Canada Inc.

Atlantic Packaging Products Ltd.

Atotech Canada Ltd. Autopro Automation Consultants Ltd.

BASF Canada Inc.

BHP Billiton - Ekati Diamond Mines BHP Billiton Canada Inc.

Babcock & Wilcox Canada Ltd. BakeMark Ingredients Canada Lld.

Barrick Gold Corporatlon

Basell Canada Inc. Baxter Corporation

The Bay

Bayer Inc. The Beer Store

Boehringer lngelheim (Canada) Ltd. Bombardier Transportation Canada Inc. Brink's Canada Limited

Bristol-Myers Squibb Canada Co.

Britco Structures Inc. Broan-NuTone Canada Inc. Bruce Power

Bunge North America CHEP Canada CKF Inc. CNH America, LLC.

Cabot Canada Ltd . Campbell Company of Canada

Canada Safeway Limited Canadelle Inc.

Canadian Forest Products Ltd. Canadian National Railway Company

Canadian Pacific Railway Canexus Limited Cantor Pulp Limited Partnership

Canon Canada Inc. Canpotex Limited

Cargill Limited


Caterpillar of Canada Corporation Centerra Gold Inc.

Christie Digital Systems Inc. The Churchill Corporation

Co-op Atlantic

Cognis Canada Corporation Compass Group Canada Country Ribbon Inc.

Cytec Canada Inc.

DENSO Manufacturing Canada, Inc. DSM Nutritional Products Canada Inc.

Daishowa-Marubeni International Ltd. Danone Canada Inc.

De Beers Canada Inc., Corporate Division De Beers Canada Inc., Exploration Division

De Beers Canada Inc., Mining Division Deeley Harley-Davidson Canada Direct Energy Marketing Ltd.




Dow Coming Canada Inc. Dr Pepper Snapple Group

Dr. Oetker Ltd. Dundee Precious Metals

Dyno Nobel Canada Inc. EFW Radiology E.l. du Pont Canada Company EMD Serono Canada Inc.

ERCO Worldwide EWOS Canada Ltd.

Eli Lilly Canada Inc. Elkem Metal Canada Inc.

Essar Steel Algoma Inc.

Ferrero Canada Limited Commercial Division Ferrero Canada Limited Industrial Division

Finning International Inc.

Fisher & Paykel Healthcare Inc. Forbo Linoleum Inc.

Gates Canada Inc. General Kinetics Engineering Corporation

Gerdau Ameristeel GlaxoSmilhKiine Inc. Graceway Pharmaceuticals

Graham & Brown

Grand & Toy Griffith Laboratories Limited

Group SEB Canada Inc. Henkel Canada Corporation

Hilti (Canada) Ltd. Hobart Food Equipment Services Canada

Hoffmann-La Roche Ltd.

Hudson's Bay Company HumanWare

Hunter Dickinson Inc.

Huntsman Polyurethane INVISTA (Canada} Company

ITW Construction Products Ingersoll-Rand Canada Inc.

lnnophos Canada Inc. J. H. Ryder Machinery Limited

Janssen Inc.

John Deere Limited Canada Jubilant Life Sciences Limited - Draximage

Jubilant Life Sciences Limited - Draxis Pharma

Kellogg Canada Inc. Kennametal Ltd.


Kinross Gold Corporation

Kruger Products Kuehne+ Nagel Ltd.

LANXESS Inc.

LS Travel Retail North America Labatt Breweries of Canada Lake Shore Gold Corp.

Lantic Inc. Lego Systems, Inc. Lehigh Hanson Linde Canada Limited

Lotus Bakeries Lowe's Companies, Inc.

MDA Mainstream Canada Ltd. Mark Anthony Group McCormick Canada Co.

McEihanney Consulting Services Ltd. The McEihanney Group Ltd.

McEihanney Land Surveys Ltd. Meridian Lightweight Technologies Inc.

Methanex Corporation

Michelin North America (Canada} Inc. Minas Basin Pulp & Power Co. Lld. Mitsubishi Canada Limited

Montship Inc.

The Mosaic Company Mustang Survival Corp.

Mylan Pharmaceuticals ULC NOVA Chemicals Corporation

Navtech Systems Support Inc. Neopost Canada

Newmont Mining Corporation of Canada Limited Nord ion

North Atlantic Refining

Northern Pulp Nova Scotia Corp. Nova Scotia Power Inc.

Novartis Pharmaceuticals Canada Inc. Novo Nordisk Canada

Nycomed Canada Inc. Oakrun Farm Bakery Ltd.

Omicron

L'Oreal Canada Inc. P & H MinePro Services

PPG Canada Inc.

PPG Canada Inc. - Fine Chemicals Division

PPG Canada Inc. - Industrial Coatings Division

PPG Canada Inc. • Performance Glazing Division Pan American Silver Corporation

Page 5 of7


Mr. Ear1 Ludlow January 6, 2012

Penske Truck Leasing PepsiCo Canada

Phantom Mfg. (lnt'l) Ltd. Pharmascience Inc.

Pioneer Hi-Bred Limited Potash Corporation of Saskatchewan Inc.

Praxair Canada Inc. Procter & Gamble Inc. Puratos Canada Inc. Richemont Canada Inc.

Rio Tinto- Diavik Diamond Mines

Rio Tinto - Fer et Titane Inc. Rio Tinto Iron Ore

Ritchie Bros. Auctioneers {Canada) Ltd. Rogers Communications Inc. Rothmans, Benson & Hedges Inc.

Russel Metals Inc. SABIC Innovative Plastics Canada Incorporated SEMAFO inc.

SMS Equipment Inc. Sainl-Gobain Abrasives Canada Inc

Saint-Gobain Ceramic Materials Canada!Abrasive Materials

sanofi-aventls Schneider Electric

Sears Canada Inc. The Shaw Group Limited

Sherritt International Corporation

Shire BioChem inc. Shiseido (Canada) Inc.

Shoppers Drug Mart Corporation

Shore Gold Inc. Slegwerk Canada Inc. Siemens Canada Limited


Sleeman Breweries Ltd. Soci~te en Commandite Tafisa Canada Inc.

HayGroup~

L_ - -- -------

Sofina Foods Inc.

Sonoco Canada Corporation TELUS Communications Inc.

Tail Electronics Ltd.

Takeda Pharmaceuticals North America, Inc. Taro Pharmaceuticals Inc. Tech Data Canada Corporation Teck Resources Limited

Teck Resources Limited - Highland Valley Copper Teck Resources Limited- Trail Operation T eekay Corporation

Tembec Inc.

Thales Rail Signamng Solutions Thompson Creek Metals Company Thrifty Foods Inc.

Timminco Limited Tolko Industries Ltd.

Toromont CAT, A Division ofToromont Industries Ltd. Trane Canada Co.

Twin Rivers Paper Company Ultramar Ltee uniPHARM Wholesale Drugs Ltd.

Uranium One Inc. Vale !nco Limited

Vicwest Income Fund Viterra Inc.


VPL Enterprises Ltd. Wai-Mart Canada Corp.

Wescast Industries Inc.

West Fraser Timber Co. Ltd. Winners Merchants International L.P. Xstrata Copper Canada

Yara Belle Plaine Inc.

Zellers Zellstoff Celgar Partnership limited

Page6 of7


Mr. Earf Ludlow January 6, 2012

I HayGroup® --------

Appendix C - Atlantic Canada Industrial Comparator Group - Industrial Organizations with jobs in Atlantic Canada (N = 73)

3M Canada Company A&W Food Services of Canada Inc. ACA Co-operative limited AV Nackawic Inc. Agfa Healthcare Canada Akzo Nobel Canada Inc. Amcor Limited Andrew Peller Limited Ashland Inc. Ashland Inc. - Valvoline Ashland Inc. -Water Technologies Babcock & Wilcox Canada Ltd. The Bay Brink's Canada Limited CHEP Canada CKF Inc. CNH America, LLC. Canada Post Corporation Canadian National Railway Company Canon Canada Inc. Cargill Limited Co-op Atlantic Country Ribbon Inc. Danone Canada Inc. Direct Energy Marketing Ltd . E.l. duPont Canada Company Gates Canada Inc. Grand & Toy Halifax Port Authority Halifax Regional Water Commission Hilti (Canada) Ltd. Ingersoll-Rand Canada Inc. Kruger Products Kuehne + Nagel Ltd. LS Travel Retail North America Labatt Breweries of Canada Lantic Inc.

Linde Canada Limited McEihanney Land Surveys Ltd. Michelin North America (Canada) Inc. Minas Basin Pulp & Power Co. Ltd. Montship Inc. NB Power Holding Corporation North Atlantic Refining Northern Pulp Nova Scotia Corp. Nova Scotia Power Inc. P & H MinePro Services PPG Canada Inc. - Industrial Coatings Division PPG Canada Inc. - Performance Glazing Division Penske Truck Leasing Potash Corporation of Saskatchewan Inc. Praxair Canada Inc. Rio Tinto Iron Ore Ritchie Bros. Auctioneers (Canada) Ltd. Rogers Communications Inc. Russel Metals Inc. SABIC Innovative Plastics Canada Incorporated Sears Canada Inc. The Shaw Group Limited Shoppers Drug Mart Corporation Sleeman Breweries Ltd. Sonoco Canada Corporation TELUS Communications Inc. Tech Data Canada Corporation Toromont CAT, A Division of Toromont Industries Ltd. Trane Canada Co. Twin Rivers Paper Company Ultramar Ltee Vale Inca Limited Vicwest Income Fund Wai-Mart Canada Corp. Winners Merchants International L.P. Zellers

CA-NP-199, Attachment B Page 8 of 22- - - -- - -

- -

NEWFOUNOLAND~

POWER A FORTIS COMP)I'.NY

January 16, 2013

Mr. Earl Ludlow President & ChiefExecutive Officer Newfoundland Power P. 0. Box 8910 55 Kenmount Road St. John's, NL AlB 3P6

Dear Mr. Ludlow,

Hay Group Limited 121 King Street West Suite 700 Toronto, ON MSH 3X7 Canada

tel +1.416.868.1371 fax +1 .416.868.6871

www.haygroup.com/ca

Re: Manager Compensation - 2013 Estimated Market Actual Salary Median


Our views are based upon the current evaluation of the roles using the Hay Group job evaluation methodology and compensation information in the Hay Group database accumulated from the Commercial Industrial non-executive market effective May 1, 2012. The companies included in this sample are listed in Appendix A. As with previous years, additional market information for the Manager, Regional role has been provided in Appendix B.

Table 1, on the following page, illustrates the estimated 2013 market actual salary medians (Column 7) for your managers. This is based on 2012 market actual salary data (Column 6) adjusted upwards by 2.9%, based on data collected between July and August 2012, to estimate 2013 market practice.

Page 1 of7


Table 1 -Estimated Newfoundland Power 2013 Market Actual Salary Medians - ----

!:;tlrl'latt!d ZOl~ Novicundfaml

M~rlo~t llctun l l'owll'r 2.01.2 Mar~N r;tllTlatell 2.!lH

Cu"~lll ~ , 1~"1 M~:lr.:n lOU Ar1 Uifl llHual53bry M.,k~l -"rlu~l

' PoSitiOn 1Pirumb-2nl tvaiuJt•o" lin 1.0111 !lase 5a la·~ Median 5~1J I •J Mu!l"'n I

!I I PI [~ I tuJ [51 (i;l [~1 - - -

I Manager Regiona I

Manager Regional

Manager Eastern Region & Corporate Communication

Manager Operations

Manager Human Resources & Corporate Affairs

Manager Customer Relations & Info Servs.

Manager Engineering

Manager Rates & Regulation

Manager Finance

Jardine

Feehan

Pike

Lacour

Obrien

Collins

Munrav

Henderson

Hiscock

1U4 $160;800

1124 $160,800

1056 $153,500

954 $142,900

954 $142,900

954 $142,900

954 $142,900

890 $138,200

890 $138,200




$163,500 $167,800 $172,700

$140.000 $167,800 $172,700

$163,500 $157,300 $161,900

$154,000 $142,700 $146,800

$152,500 $142,700 $146,800

$152,500 $142,700 $146,800

$147,000 $142,700 $146,800

$138,800 $138,400 $142,400

$128,000 $138,400 $142,400

January 16,2013 Page 2 of7


Appendix A- Commercial Industrial Comparator Group - Non-Executive (N = 261 )

3M Canada Company A&W Food Services of Canada Inc.

ALS Canada Ltd. AMEC Americas Limited

ATCO 1-Tek Abbott Laboratories, Limited

Acuity Brands Agfa Healthcare Canada Agfa Inc.

Ainsworth Engineered Canada L. P. Air Products Canada Ltd. Akzo Nobel Canada Inc.

Alamos Gold Inc. Alberta-Pacific Forest Industries Inc. Alcon Canada Inc.

Aluminerie Alouette Inc.

Amgen Canada Inc. Amway Canada Corporation

ArcelorMittal Canada ArcelorMittal Canada Contrecoeur-Ouest Inc.

ArcelorMittal Canada Hamilton ArcelorMittal Canada Saint~Patrick

ArcelorMittal Dofasco Inc. ArcelorMittal Mines Canada ArcelorMittal Tubular Products -Automotive Division

Arrow Transportation Systems Inc.

Astellas Pharma Canada Inc. AstraZeneca Canada Inc. Atlantic Packaging Products ltd.

Atlantic Poultry Incorporated

Atotech Canada Ltd.

BASF Canada Inc. BHP Billilon - Ekati Diamond Mines

BHP Billiton Canada Inc.

BlC Graphic Canada

Babcock & Wilcox Canada Ltd. BakeMar1< Ingredients Canada ltd.

Barilla Barrick Gold Corporation Basell Canada Inc.

Baxter Corporation

The Bay Bayer Inc.

Bekaert Canada Belden COT (Canada} Inc.

Bericap North America Inc.

Boehringer lngelheim (Canada) Ltd.

Bombardier Transportation Canada Inc. Brink's Canada Limited Bristol-Myers Squibb Canada Co.

Broan-NuTone Canada Inc. Bruce Power L.P. CAE Inc.

CGGVeritas

CHEP Canada Inc. CKF Inc. CNH America, LLC. Cabot Canada ltd.

Campbell Company of Canada Canadelle Inc.

Canadian Forest Products ltd. Canadian National Railway Company

Canadian Pacific Railway

Canexus Corporation Canfor Pulp Limited Partnership

Canon Canada Inc. Canpotex Limited Cargill Limited


Caterpillar Logistics Services Canada Limited Caterpillar of Canada Corporation

Caterpillar Tunneling Canada Corporation Centerra Gold Inc.

Christie Digital Systems Inc. Chubb Edwards

The Churchill Corporation ~pAtlantic

Compass Group Canada

Coty Canada

Country Ribbon Inc. DP World Canada

DSM Nutritional Products Canada Inc. Danfoss Inc.

De Beers Canada Inc., Corporate Division

De Beers Canada Inc., Exploration Division De Beers Canada Inc., Mining Division

Deeley Harley-Davidson Canada Detour Gold Corporation Direct Energy Mar1<eting Ltd.




Dr. Oetker Ltd. EFW Radiology E. I. duPont Canada Company EMD Serono Canada Inc. ERCO Worldwide EWOS Canada ltd. Eli Lilly Canada Inc. Elkem M6tal Canada Inc. Essar Steel Algoma Inc. Fisher & Paykel Healthcare Inc. G4S Cash Services (Canada) Ltd. Gates Canada Inc. General Kinetics Engineering Corporation Gerdau Long Steel North America GlaxoSmithKiine Inc. Goldcorp Inc. Golf Town Graham & Brown Grand & Toy Griffith Laboratories Limited Henkel Canada Corporation Henry Schein Canada Hilti (Canada) Ltd. Hobart Food Equipment Services Canada Hoffmann-La Roche Ltd. Home Outfitters HudBay Minerals Inc. Hudson's Bay Company HumanWare Hunter Dickinson Inc. Huntsman Polyurethane INEOS Canada Partnership INVISTA (Canada) Company Ingersoll-Rand Canada Inc. lnnophos Canada Inc. Janssen Inc. John Deere Limited Canada Johnson Matthey Ltd. K+S Potash Canada KGHM International ltd.

K.l. Pembroke KPMGMSLP Kellogg Canada Inc. Kemira Chemicals Canada Inc. Kennametal Ltd. Kimberly-Clark Corporation Kinross Gold Corporation Kongsberg Automotive

Kruger Products LANXESS Inc. Labatt Breweries of Canada Lake Shore Gold Corp. Lantic Inc. Lantic Inc. - Rogers Sugar Division Lego Systems, Inc. Lehigh Hanson Materials Limited leo Pharma lifelabs linamar loblaw Companies Limited Lotus Bakeries Lowe's Companies, Inc. MDA MERSEN Canada On Ltd. MERSEN Canada Toronto Inc. Maidstone Bakeries Co. Mainstream Canada Ltd. McEihanney Consulting Services Ltd. The McEihanney Group Ltd. McEihanney land Surveys ltd. Merz Pharma Canada Methanex Corporation Michelin North America (Canada) Inc. Minas Basin Pulp & Power Co. ltd. The Minto Group Mitsubishi Canada limited Montship Inc. The Mosaic Company Navtech Systems Support Inc. North American Palladium ltd. North Atlantic Refining Northern Pulp Nova Scotia Corp. Novartis Pharmaceuticals Canada Inc. Novo Nordisk Canada Omicron

L'Or6al Canada Inc. Otis Spunkmeyer Canada Limited Outotec (Canada) ltd. OxyVinyls Canada Inc. PPG Canada Inc. PPG Canada Inc. - Fine Chemicals Division PPG Canada Inc. - Industrial Coatings Division PPG Canada Inc. - Performance Glazing Division Pan American Silver Corporation Penske Truck Leasing PepsiCo Canada



Phantom Mfg. (lnt'l) Ltd. Pharmascience Inc. Pioneer Hi-Bred Limited

Potash Corporation of Saskatchewan Inc. Praxair Canada Inc.

Procter & Gamble Inc. Purdue Pharma

Richemont Canada Inc. Rio linto - Diavik Diamond Mines

Rio linto Iron Ore Ritchie Bros. Auctioneers (Canada) Ltd.

Rolls-Royce Canada ltd.

Rothmans, Benson & Hedges Inc. Runge Limited Russel Metals Inc. SABIC Innovative Plastics Canada Incorporated SEMAFO inc. SNC-Lavalin Group Inc.

Saint-Gobain Abrasives Canada Inc.

Saint-Gobain Ceramic Materials Canada/Abrasive Materials Sanofi Canada Saskatchewan Rough rider Football Club

Schneider Electric Sears Canada Inc.

The Shaw Group Limited

Sherritt Coal

Shiseido (Canada) Inc. Shore Gold Inc. Siegwerk Canada Inc.


Sleeman Breweries Ltd. Soci6t6 en Commandite Tafisa Canada Inc.

Sofina Foods Inc.

Sonoco Canada Corporation

Suncor Energy Inc. Syncrude Canada Ltd. TELUS Communications Inc.

Tait Electronics Ltd.

I HayGroup

Takeda Canada Inc. Taro Pharmaceuticals Inc.

Tala Global Beverages Canada Teck Resources Limited

Teck Resources Limited- Highland Valley Copper

Teck Resources Limited -Trail Operation T eekay Corporation Tembeclnc.

Teranet Inc. Teva Canada Limited

Thompson Creek Metals Company Tolko Industries ltd.

TomTom International

Toromont CAT, A Division ofToromont Industries Ltd. Toys "R" Us (Canada) Ltd.

Ultramar Ltl!e uniPHARM Wholesale Drugs Ltd.

Uranium One Inc. Vale lnco Limited

Vallourec Tubes Canada Inc. VAM Canada

Viterra Inc.


VPL Enterprises ltd. VWR International

W.E.T. Automotive Systems Ltd.

Wai-Mart Canada Corp. WD-40 Products Canada Ltd.

Wescast Industries Inc. West Fraser limber Co. Ltd.

Winners Merchants International L.P. Xstrata Copper Canada

Xstrata Nickel Canada Xstrata Zinc Canada Yara Belle Plaine Inc.

Yukon Zinc Corporation Zellstoff Celgar Partnership Limited


Appendix B: Manager, R~ional Market Comparison

-

Commer;:1al Comm~rcial Allantlt Cimild<I

tndu:;tnill lndumial Industria l 1

M;~rhet (Non-hec Only) {Exec & Non-heel (Ellec & Non-Exec) - -

2102 Mari<et Act-uat Salary Median $167,800 $180,400 $136,100

Estimated 2013 Market Salary Median $172,700 $185,600 $140,000

Note: 1. See Appendix c for a list of Industrial organllatlons with jobs In Atlantic Canada.

January 16, 2013 Page 6 of7


Appendix C - Atlantic Canada Industrial Comparator Group -Industrial Organizations with jobs in Atlantic Canada (N = 73)

3M Canada Company

A&W Food Services of Canada Inc. Acuity Brands Agfa Healthcare Canada

AgraPoint International, Inc.

Akzo Nobel Canada Inc. Atlantic Poultry Incorporated

Babcock & Wilcox Canada Ltd. The Bay

Brink's Canada Limited

CHEP Canada Inc. CKF Inc. CNH America, LLC.

Canada Post Corporation Canadian National Railway Company

Canon Canada Inc.

Cargill Limited

Chubb Edwards Co-op Atlantic Country Ribbon Inc. Direct Energy Marketing Ltd.

Dow Chemical Canada Inc. E. I. du Pont Canada Company

G4S Cash Services (Canada) Ltd.

Gates Canada Inc.

Golf Town Grand & Toy

Halifax Port Authority

Halifax Regional Water Commission Halifax-Dartmouth Bridge Commission Henry Schein Canada

Hilti (Canada} ltd. Home Outfitters

Ingersoll-Rand Canada Inc. KPMG MSLP

Kemira Chemicals Canada Inc.


Kruger Products

Labatt Breweries of Canada Loblaw Companies Limited

Marine Atlantic Inc. McEihanney Land Surveys Ltd.

Michelin North America (Canada) Inc. Minas Basin Pulp & Power Co. Ltd.

NB Power Holding Corporation North Atlantic Refining

Northern Pulp Nova Scotia Corp.

Nova Scotia Egg Producers

PPG Canada Inc. - Industrial Coatings Division PPG Canada Inc. - Performance Glazing Division Penske Truck Leasing

Potash Corporation of Saskatchewan Inc. Praxair Canada Inc.

Ritchie Bros. Auctioneers (Canada) Ltd. Rolls-Royce Canada Ltd.

Rothmans, Benson & Hedges Inc. Russel Metals Inc.

SABIC Innovative Plastics Canada Incorporated Sears Canada Inc.

The Shaw Group Limited Sleeman Breweries ltd.

Sonooo Canada Corporation Suncor Energy Inc.

TELUS Communications Inc.

Toromont CAT, A Division of Toromont Industries Ltd. Toys "R" Us (Canada) Ltd. Ultramar Lt~ Vale lnco Limited

VAM Canada Wai-Mart Canada Corp.

Winners Merchants International L.P.

Xstrata Nickel Canada Xstrata Zinc Canada

January 16, 2013 Page 7 of?


NEWFOIJNOLANO~

POWER A FORTIS COMAO.NY

January 15, 2014

Mr. Earl Ludlow President & Chief Executive Officer Newfoundland Power P. 0. Box 8910 55 Kenrnount Road St. John's, Newfoundland AlB 3P6

Dear Mr. Ludlow,

HayGroup~

L_________ ---------


tel +1 .416.868.1371 fax +1.416.868.6871

www.haygroup.com/ca

Re: Manager Compensation - 2014 Estimated Market Actual Salary Median


Our views are based upon the current evaluation of the roles (updated in November, 2013) using the Hay Group job evaluation methodology and compensation information in the Hay Group database accumulated from the Commercial Industrial non-executive market effective May 1, 2013. The companies included in this sample are listed in Appendix A.

Table 1, on the following page, illustrates the estimated 2014 market actual salary medians (Column 7) for your managers. This represents 2013 market actual salary data (Column 6) adjusted upwards by 2.5%, based on data collected in July 2013 for the purpose of estimating 2014 market practice.

- --- - - ---

- --

Pae1of4


Mr. Earl ludlow Newfoundland Power

I HayGroup

Table 1 -Estimated Newfoundland Power 2014 Market Actual Salary Medians - - -

f\~Jmitio:t! /.'01.3 Nt1 ~ovft11J ndii1 n d

t11trnklll ~rhli11 ~n~'['lr ~Ot3 M ;u h!!l r"-t 11'1141H.O ;o1 l

s,,l.n"" tJ11•rfi:m llr~ lOU A~1u .d H.nup l 5-ai.a • v ,'1Joli r P;~.,1 ~nuill

Pc..,Htcn lm:un1b~n 1 i'lo'i.lhMaion ~DD t @.;H~ S.:. t.t r'i i\11-citl!l n S;.'l lu.-y M11rliiln.

Ill _ Il l 1~ 1 141 (5i ll•l P I_

Manager, St. John's Region uo: ~~~~ ·

Manager, Enclneerfl'l8 Jardine 1040 $172,700 2

Manager, Western Regio!l ewn 10-10 .s-m.t~ J

Manager, Easttm Reslon Pike 1040 $161,900 J

Manager, Network Operatl~ WJXI[ J.cMQ .s ~0. Manager, Customl!r Relations &

Collins 994 $146,800 5 lnformatlon Technology

Manager, Human Resources - {]1,11~ -~· !l~~

Manager, Rates & Regulation Hendt"on 890 $142,400

Manager, Fina nee ~ $' ~it-1~:'1_00

Manager, Corpcnte AffaiB and Md:anhy BOS

Communications 1. Based on former Mana.,.-£nilneertnaeonluadon af 95<4 2. Buood on,.,.,.,. MollO.,.. Reslonal I!VIIuadon of lU~ 3. Bosed on ,.,.,.,. Mona...- £Altom Res~ on A Cotpotob! CDrmlunlcdon enhaadon of 1056 ~. Buood on,.,.,.,. Moi\I.,..Opordons Mlludon of9So4 S. lloJO'd on ror....,. Mol\l.,.. CUt-lleladon1 A Info s.n.s. I!VIIuadon of 954 &. Bated on ror,., Monap Flnan<e ... till don ofB!IO • No .. dmab! mode In lOll of 2013 Mor'<et Al:tull So lory Medlon




SZSI>.UlO jJ:1li:11)Q $Ut!MO

$168,400 $158,500 $162,500

p:n,blo $il --.u ~

$168,400 $158,500 $162,500

s ~.!lQ!l· ~ 51.1il:J500

$158,600 $151,500 $155,300

nw~ · · ~~ mo.~

$143,000 $143,700 $147,300

-sm~ $~9~ S;t~l.S

$150,000 $139,400 $142,900

January 15,2014 Page2 of4



Appendix A- 2013 Commercial Industrial Market (n=260)

3M Canada Company A&W Food SeiVIces of Canada Inc. ALS Canada Ltd. AMEC Americas Limited ATCOI-Tek AV Nackawfc Inc. Abbott Laborulorles, Limited Ainsworth Engineered Canada L. P. Air Prod!E\s Canada Ltd. Akzo Nobel Canada Inc. Alamos Gold Inc. Alberta Newspllnt Company Alberta-Paclflc Forest lnduslrlas Inc. Aloon Canada Inc. Allergen Canada Inc. Arnoor Rigid PlasUcs Arngan Canada Inc. Arnway Canada CorponUion Andrew Paner Limited Apple Canada Inc. Aptalls Pharma Inc. An:elorMiHal Canada An:elorMiHal Canada Contracoaur-Ouesllnc. ArcelorMIHal Canada Hamilton ArcelorMIHal Canada Salnl-Palllck ArcelorMittal Dofasoo Inc. ArcelorMittal Minas Canada An:elorMittal Tubular Products -Automotive Division Archer-Daniels-Midland Company (Canada) Lld. Arfa Foods Inc. Arrow Transportation Systems Inc. Ashland Inc. Astellas Pharma Canada Inc. Astrazeneca Canada Inc. Atlantic Packaging Products Lld. Atotech Canada Lld. Avis Budget Group, Inc. BASF Canada Inc. BHP Blllllon Canada Inc. BIC Graphic Canada Babcock & Wiloox Canada Lld. Balllla Barrick Gold CorporaUon Basel! Canada Inc. The Bay Bayer Inc. Bakaerl Canada Ban taler Automotive Big Lots Canada, Inc. Blue Mountain Resorb Limited Boehringer lngelhalm (Canada) Ltd. Bombanller Inc. Bonduelle North Amadea Inc. Brink's Canada Limited Bristol-Myers Squibb Canada Co. Broan-NuTone Canada Inc. Bruce Power L.P. Buckman La bora toiles of Canada Ltd. CGGVelltas CHC Helicopter CKF Inc. CNH Amadea, LLC. Cabot Canada Ltd. Campbell Company of Canada Canada Safeway Limited Canadelle Inc.

Canadian Forest Products Ltd. Canadian National Railway Company CaneX\.Is Corporation Canfor Pulp Limited Partnership CannArnm Occupational Testing Services Canpotex Limited Capgemlnl Canada Capital Power Corporation Cargill Limited Catalyst Paper Corporation CaiBrplllar of Canada Corporation CaiBrplllar Tunneling Canada C01p0ra6on Chemtrada Logistics Chamlura Canada Co Cia Chllstie Dlgllal Syslams Inc. Chubb Edwards The Churchill Corporation Co-op AUantic Compass Group Canada Continental Tire Canada, Inc. Counlly Ribbon Inc. Cytec Canada Inc. Danfoss Inc. De Beers Canada Inc., Corporate Division Da Beers Canada Inc., Exploration Division De Beers Canada Inc., Mining Division Deeley Halley-Davidson Canada Detour Gold Corporation Dominion Diamond Corporation - Ekatl Diamond Mine Dow Chemical Canada Inc. Dr Pepper Snapple Group Or. Oelker Ltd. E.l. du Pont Canada Company EMD Serono Canada Inc. EWOS Canada Ltd. Eden Valley Poultry Inc. Ell Ully Canada Inc. Essar Steel Algoma Inc. FMC or Canada, Ltd. Finning (Canada) Finnlng lntemaHonallnc. FISher & Paykel Appliances GDF SUEZ Energy North Amadea, Inc. Gap (Canada) Inc. General Kinetics Engineering CorpornUon Glatfelter GlaxoSmllhKiine Inc. Goldcorp Inc. Golf Town Grand &Toy Griffith Laboratories Llmllad Group SEB Canada Inc. Henkel Canada Corporation Henry Schein Canada Hoffmann-La Rocha Lld. Holcim (Canada) Inc. Home Outfitters HudBey Minerals Inc. Hudson's Bey Company HumanWara Hunter Dickinson Inc. Huntsman Polyurethane INVISTA (Canada) Company lntarqulsa Canada Janssen Inc. John Deere Limited Canada




HayGroup~

~·-----------------------------

Appendix A - 2013 Commercial Industrial Market (n=260) (cont'd)

Johnson Matthey Ud. K+S Potash Canada KGHM lntemalional Ltd. KPMGMSLP Kellogg Canada Inc. Kemlra Chemicals Canada Inc. Kennametalltd. Klmberty-Ciar1t Corporation Kinross Gold Corporation Kongsberg Automollve Kruger Prodlds LANXESS Inc. La batt Breweries of Canada Lake Shora Gold Corp. Lantlc Inc. Lanllc Inc. - Rogan~ Sugar DMslon Lehigh Hanson Mall!rlals Limited LeoPhanna life labs Una mar Liquor Stores GP Inc. loblaw Companies Umiled lowe's Companies Canada, ULC MacoPharma Canada Inc. Malns1nlam Canada Ud. Marine Harwst Canada McCormick Canada Co. McEihanney Consultlng Services ltd. The McEihanney Group Ltd. McEihanney Land Surveys Lid. Melhanex Corporation Michelin North America (Canada) Inc. Millar Western Forasl Products Lid. The Minto Group Mission Group Enterprises Mitsublshl Canada Limited Montshlp Inc. Morneau Shepen Inc. The Mosaic Company NaYIDch Systems Support Inc. Neovla Logistics Services Nike Canada Corp. Noralla Lodge ltd. North American Palladium ltd. Novartls Pharmaceuticals Canada Inc. Novo Nordlsk Canada Nutreco Canada Inc. OEM Remanulilcturlng Occidental Chamlcal Corporation L'Orbl Canada Inc. Overwaltea Food Group LP PPG Canada Inc. PPG Canada Inc. - lndustrlal Coatings Division PPG Canada Inc. · Performance Glazing DMslon Pan American Sliver Corporation Penske Truck Leasing PepsiCo Canada Pharmasclence Inc. Pioneer HI-Bred Limited Potash Corporation of Saskatchewan Inc. PIBXBir Canada Inc, Plfmex Manufacturing Ltd. Procter & Gamble Inc. Purdue Pharma

Randstad Canada Riche mont Canada Inc. Rio Tinto - Dlavlk Diamond Minas Rio TiniD Iron Ore Rogers Communications Inc. Rolls-Royce Canada Lid. Rothmans, Benson & Hedges Inc. Russel Metals Inc. SEMAFOinc. SMS Equipment Inc. SNCrl..avalin Group Inc. Sand~ Canada Inc. sanofl canada Inc Seed Hawk Inc. Tha Shaw Group Umlted ShenittCoal Shenittlnternational Corporation Shoppers Drug Mart Corporallon Shore Gold Inc. Shred-it lntarnatlonal Sldel Canada Inc. Siemens Canada Umiled Slka Canada Inc. Sliver Standard Resoun:es Inc. Skrattlng Sleeman Breweries Ltd. Societe en Commandite Tafisa Canada Inc. Sofina Foods Inc. Sonoco Canada Corporation Strathcona Paper LP Sultran Ltd. Suncor Energy Inc, TELUS Communications Inc. TVI Pacific, Inc. Takeda Canada Inc. Tala Global Beverages Canada Tedmlp Canada Ltd. Teck Resourt:es Umited Tack Resourt:es Umlted- Highland Valley Copper Tack Resources Umited - Trail Operation Teakay Corporation Tembeclnc. Terunellnc. Thales Canada Inc. Thompson Creek Matals Company Tlmbe!West Forast Corp. T~ko lndustrles Ltd. Tom Tom International Toromont CAT, A Division ofToromonllndusb1as Ltd. Total E&P Canada Toys "R" Us (Canada) ltd. Ultramar LIM uniPHARM Wholesale Drugs Ltd. Uranium One Inc. Vale Canada Ltd Vallourec Tubes Canada Inc. Vilerra Inc. Wei-Mart Canada Corp. Wescast lndusb1es Inc. West Fraser Timber Co. Ltd. Winners Merdlants lntamalional L.P. Xslrata Copper Canada Xslrata Nickel Canada Xstrata Zinc Canada



NEWFOUNDLAND.-~

POWER A FORTIS COMPIO.NY

January 19, 2015

Mr. Gary Smith President & ChiefExecutive Officer Newfoundland Power P. 0. Box 8910 55 Kenmount Road St. John's, Newfoundland AlB 3P6

Dear Mr. Smith,

Hay Group Limited 121 King Street West Suite 700 Toronto, ON M5H 3X7 canada

tel +1.416.868.1371 fax +1 .416.868.6871

www.haygroup.com/ca

Re: Manager Compensation- 2015 Estimated Market Actual Salary Median


Our views are based upon your current evaluation of the roles using the Hay Group job evaluation methodology and compensation information in the Hay Group database accumulated from the Commercial Industrial non-executive market effective May 1, 2014. The companies included in this sample are listed in Appendix A.

Table 1, on the following page, illustrates the estimated 2015 market actual salary medians (Column 7) for your managers. This represents 2014 market actual salary data (Column 6) adjusted upwards by 2.6%, based on data collected between July and August 2014 for the purpose of estimating 2015 market practice.


Mr. Gary Smith Newfoundland Power

I HayGroup~ __

Table 1 -Estimated Newfoundland Power 2015 Market Actual Salary Medians

~;t 1matc-d 201·'1 f'Jt•Wf(HmdLltld :01Iil Mar!tet E~bm.;t!l"d :!Oi5

~V1.::rl;t•! .Anu.,l fi.1l:u·., ~[)w'.'' ~Oilll\tt·J-31 .hl.t~ Sni11ry ~t;~het l\-ctw3l

Pt)! ltlo-n Jifll:cn"Jbe?!'t I'J,::.IW..l'i •.:ln ~.ia:rfi;u1 11rr: ~lU31 13:lle S.11Lu-y ~1"rll iln ~.il};ll'f Meilnm

121 __ [Jl 111 (ol ~~ _ I_GL _ 4/l

Manager, Engineerin& Jardine 1040 $162,500

Manager, St. John's Region Pike 1040 $162,500 (l)

Manager, Eastern ReaJon Chubbs 1040 $162,500 (Z)

Manager, Re&lonal Feehan 1040 $162,500 (31

Manager, Operat1ons Lamur 1040 $162,500

Manager, Operations Support Manning 994 141

Manager, Technoloav Collins 994 $155,300 (S)

Manager, Human Rl!5oun:es and Corp Affa O'Brien 954 $1S0,400 (6)

Manager, Customer and Corporate Relal!c l'keartlly 954 $142.900 171

Manager, Revenue and Supply Henderson 890 $147,300 IBI

Manager, finance Hiscock IIQS $142,900 (1) Based on evaiuaaon orror"""" Manall!r, E.u~n flellon (1040 PolntJ) (2)-incumbent [3) Basl!d on evaluadon of for....,. Manaaer, W..sll!rn ll!slon (1040 Points) 1•1-position (5) Baud on I!Yaluatlon of for,., Man11er, CUstomer Relations 1nd Information TI!Chnoioav (994 Points) (6) Based on ovaiuatlon of former Ma"ager, Human Resourc..s (954 Polrm) (7) Based on 1!1131uatfon of for...., Manaaer, Corporaii!Airalrs and CDmrnunicaijon• (805 Points) (8) Based on ovaluadon of former Man•"'"· Rate 1~ Rt~ulatlon [805 Points)



Christopher A. Chen, LLB National Director Executive Compensation and Reward

$173,500 $163,900 $168,200

$173,500 $163,900 $168,200

$130,000 $163,900 $168,200

$160,000 $163,900 $168,200

$163,400 $163,900 $168,200

$130,000 $157,800 $161,900

$163,400 $157,800 $161,900

$161,700 $153,500 $157,500

$155,000 $153,500 $157,500

$147,300 $149,300 $153,200

$139,500 $143,700 $147,400




Appendix A- 2014 Non-Executive Commercial Industrial Market (n=274)

3M Canada Company A&W Food Services of Canada Inc. ALS Canada ltd. AMEC Americas Umited ATCO 1-Tek AV NackCMic Inc. Abbott Laboratories, Umiled Ainsworth Engineered Canada L P. Air New Zealand Air Products Canada Ltd. Alamos Gold Inc. Alberta Newsprint Company Alberta-Pacific Forest Industries Inc. Alcon Canada Inc. AltaSteel Ltd. Amcor Umiled Amgen Canada Inc. Amway Canada Corporation Andrew Peller Umiled ArcelorMittal- Baffinland Iron Mines Corporation ArcelorMittal Canada ArcelorMittal Canada ContrecoeurOuesllnc. ArcelorMittal Canada Hamilton ArcelorMittal Canada Longeuil ArcelorMittal Canada Saint-Patrick ArcelorMittal Dofasco Inc. ArcelorMittal Mines Canada ArcelorMittal Tubular ProductsAutomotive Division Archer-Daniels-Midland Company (Canada) Ltd. Aria Foods Inc. Ashland Inc. Ashland Inc. - Performance Materials Ashland Inc. -Specialty Ingredients Ashland Inc. -Valvoline Ashland Inc. -Water Technologies Astellas Pharma Canada Inc. AstraZeneca Canada Inc. Atlantic Packaging Products Ltd. Atotech Canada Ltd. BASF Canada Inc. BHP Billiton Canada Inc. BIC Graphic Canada Babcock & Wilcox Canada Ltd. Barilla Barrick Gold Corporation Basel! Canada Inc. Baxter Corporation The Bay Bayer Inc. Bekaert Canada BEL Group

Belden (Canada) Inc. Bericap North America Inc. Boehringer lngelheim {Canada) Ltd. Bombardier Inc. Bonduelle North America Inc. Booking. com B.V. Bristol-Myers Squibb Canada Co. Broan-NuTone Canada Inc. Bruce Power LP. CAE Inc. CEPSA Quimica Montreal L.P. CGGVerilas CHEP Canada Inc. CKFinc. CNH America, LLC. CSL Silicones Inc. Cabot Canada Ltd. Campbell Company of Canada Canada Goose Inc. Canada Safeway Umiled Canadelle Inc. Canadian Forest Products Ltd. Canadian National Railway Company Canadian Tire Corporation Cantor Pulp Umiled Partnership Canpotex Limited Capgemini Canada Capstone Mining Corp. Cargill Limited Catalyst Paper Corporation Caterpillar of Canada Corporation Caterpillar Tunneling Canada Corporation Centerra Gold Inc. Cermaq Canada Certain Teed Gypsum North American Services Christie Digital Systems Inc. Chubb Edwards Cliffs Natural Resources Inc. Compass Group Canada Compass Minerals International, Inc. Continental Tire Canada, Inc. ColyCanada Country Ribbon Inc. Cytec Canada Inc. DOF Subsea Canada DSM Nutritional Products Canada Inc. Danfoss Inc. De Beers Canada Inc., Corporate Division De Beers Canada Inc., Exploration Division

De Beers Canada Inc., Mining Division Deeley Harley-Davidson Canada Detour Gold Corporation Dominion Diamond Corporation -Ekali Diamond Mine Dorman Products Inc. Dow Chemical Canada Inc. E & J Gallo Winery E.l. du Pont Canada Company EMD Serono Canada Inc. Eden Valley Poultry Inc. Edmonton Eskimo Football Club Eli Ully Canada Inc. Elliott Turbomachinery Canada, Inc. Enbridge Inc. Essar Steel Algoma Inc. Ferrero Canada Limited Commercial Division First Majestic Silver Corp. Fisher & Payllel Appliances Fisher & Paykel Heallhcare Inc. Flowserve Canada Inc. Fluor Canada Ud. GDF SUEZ Energy North America, Inc. GECanada Gap (Canada) Inc. General Kinetics Engineering Corporation General Shale Brick, Inc. Geodis Wilson Canada Ltd. Gerdau Long Steel North America GlaxoSmilhKiine Inc. Glencore Canada Corporation -Copper Glencore Canada Corporation -Nickel Glencore Canada Corporation - Zinc Goldcorp Inc. Henkel Canada Corporation Henry Schein Canada Hewitt Equipemenl Limit~ Hoffmann-la Roche Ltd. Holcim (Canada) Inc. The Home Depot Canada Home Outfitters HudBay Minerals Inc. Hudson's Bay Company Hunter Dickinson Inc. Huntsman Polyurethane IKEACanada Information Services Corporation of Saskatchewan JYSKCANAOA Janssen Inc.




John Deere Umited Canada Johnson Mal\hey Ltd. K+S Potash Canada KGHM lntema~onal Ltd. KPMGMSLP Kellogg Canada Inc. Kennametal Ltd. Kimberly-Clark Corporation Kinross Gold Corporation Knauf Insulation Ltd tANXESS Inc. labatl Breweries of Canada Lafarge Canada Inc. Lake Shore Gold Corp. Lanticlnc. Lehigh Hanson Materials Umited LeoPharma Ufelabs Unamar Luxotlica Group Magotteaux Ltee Marine Harvest Canada Mary Kay, Inc. McEihanney Consulting Services Ltd. The McEihanney Group Ltd. Mc8hanney Land Surveys Ltd. Michelin North America (Canada) Inc. MindGeek Holding SARL Mission Group Enterprises Mitsubishi Canada Umiled Montship Inc. Morneau Shepelllnc. The Mosaic Company Navtech Systems Support Inc. Newmonl Mining Corporation of Canada Limited Nike Canada Corp. North American Palladium Ltd. Novartis Pharmaceuticals Canada Inc. Novo Nordisk Canada Occidental Chemical Corporation L'Oreal Canada Inc. Orica Canada Inc. P & H MinePro Services PPG Canada Inc. PPG Canada Inc. -Industrial Coatings Division PPG Canada Inc. - Perfonnance Glazing Division Pan American Silver Corporation Penske Truck Leasing PepsiCo Canada Pharmascience Inc. Pirelli Tires - Canada Plasliflex Canada Inc. Potash Corpora~on of Saskatchewan Inc. Praxair Canada Inc.

Primex Manufacturing Ltd. Procter & Gamble Inc. Purdue Pharma Richemont Canada Inc. Rio Tinto - Diavik Diamond Mines Rio Tinto - Fer et Titane Inc. Rio Tinlo Iron Ore Rogers Communications Inc. Rothmans, Benson & Hedges Inc. Russel Metals Inc. SABIC Innovative Plastics Canada Incorporated SEMAFO inc. SMS Equipment Inc. Saini-Gobain Abrasives Canada Inc. Saint-Gobain Ceramic Materials Canada/Abrasive Materials Sandoz Canada Inc. Schneider Electric Schweitzer Engineering Laboratories The Shaw Group Umited Sherritt International Corporation Shoppers Drug Mart Corporation Sham Gold Inc. Shred-it lntema~onal Siemens Canada Umited Skrel\ing Sleeman Breweries Ltd. Socillte en Commandite T afisa Canada Inc. Sofina Foods Inc. Solar Turbines Incorporated Solvay North America Sonoco Canada Corporation Staples Business Depot Stillwater Mining Company Strathcona Paper LP Styrolullon Canada Umited Sunc:or Energy Inc. TELUS Communications Inc. Takeda Canada Inc. Target Corporation Taro Pharmaceuticals Inc. Tala Global Beverages Canada Tech Data Canada Corporation Teck Resources Limited Teck Resources Umited- Highland Valley Copper Teck Resources Umited- Trail Operation T eekay Corporation Tembeclnc. Teranet Inc. Teva Canada Umi!ed Thales Canada Inc. Tim Hortons Inc. Tolko Industries ltd. Toromonl CAT, A Division of Toromonl lndusbies Ud. Total E&P Canada

I HayGroup~ ~--- ·---------

Umic:ore Canada Inc. uniPHARM Wholesale Drugs Ltd. Uranium One Inc. Vac:on Canada Vale Canada Umited Valero Energy Inc. Viterra Inc. Votorantim Cement North America Wl}.40 Products Canada Ltd. W.E.T. Automotive Systems Ltd. Wai-Mart Canada Corp. Wescasl lndusbies Inc. West Fraser Timber Co. Ltd. Westmoreland Coal Company -Canada Winners Merchants International L.P. Yamana Gold Inc. Yara Belle Plaine Inc. Zale Corporation


CA-NP-199

Attachment C



Towers Watson

Reward Review Reccommendations

May 21, 2013

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ph

y

R

etai

n th

e pr

emis

e of

the

exis

ting

com

pens

atio

n ph

iloso

phy

P

riorit

ize

and

unde

rtake

a s

yste

mat

ic re

desi

gn o

f spe

cific

rew

ard

prog

ram

s to

ens

ure

that

the

orga

niza

tion

supp

orts

and

follo

ws

thro

ugh

on th

e co

mpe

nsat

ion

philo

soph

y

Define the r

ole

/ p

urp

ose o

f diffe

rent

rew

ard

ele

ments

as p

art

NLP

’s b

roader

em

plo

yee

valu

e pr

opos

ition

(see

the

exam

ple

on th

e fo

llow

ing

page

)

Outlin

e N

LP

’s p

ositio

n o

n k

ey r

ew

ard

desig

n c

onsid

era

tio

ns m

ore

cle

arly (s

ee th

e ex

ampl

e on

the

follo

win

g pa

ge)

© 2

013

Tow

ers

Wat

son.

All

right

s re

serv

ed.


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

1.

Co

mp

en

sati

on

ph

ilo

so

ph

y –

illu

str

ati

ve e

xam

ple

Ro

le o

f b

as

e p

ay

Bas

e pa

y is

a to

ol to

bot

h at

tract

and

reta

in ta

lent

and

driv

e in

divi

dual

per

form

ance

thro

ugho

ut

the

orga

niza

tion

Ro

leo

f va

ria

ble

pa

yVa

riabl

epa

y is

a to

ol to

enc

oura

ge th

e ac

hiev

emen

t of s

peci

fic p

erfo

rman

ce o

bjec

tives

that

su

ppor

t org

aniz

atio

n pr

iorit

ies

Co

mp

eti

tive

po

sit

ion

ing

NLP

’s to

tal re

wa

rd o

ffe

ring s

ho

uld

be

alig

ne

d to

th

e m

ed

ian o

f th

e r

ele

va

nt

mar

ket f

or e

ach

empl

oyee

gro

up (w

hich

may

var

y)

Pe

rfo

rma

nc

e

ori

en

tati

on

NLP

rew

ard

prog

ram

ssu

ppor

t and

enc

oura

ge b

oth

indi

vidu

al a

nd c

olle

ctiv

e hi

gh p

erfo

rman

ce

thro

ugh

mer

it aw

ards

and

ann

ual i

ncen

tive

awar

ds re

spec

tivel

y

Aff

ord

ab

ilit

y(c

os

t

ma

na

ge

me

nt)

Our

rew

ard

budg

etan

d pr

ogra

ms

will

be s

et /

desi

gned

in li

ght o

f bot

h ex

tern

al c

ircum

stan

ces

and

inte

rnal

affo

rdab

ility.

Rew

ard

deci

sion

s w

ill be

tigh

tly g

over

ned

Pe

rfo

rma

nc

e /

rew

ard

lin

k

Per

form

ance

man

agem

ento

utco

mes

will

be d

irect

ly li

nked

to re

war

d . T

hrou

ghou

t the

yea

r, ex

cept

iona

l per

form

ance

will

be re

cogn

ized

thro

ugh

both

fina

ncia

l and

non

-fina

ncia

l mea

ns

Inte

rna

l/e

xte

rna

l

foc

us

NLP

rew

ard

prog

ram

s ba

lanc

e th

e ne

ed to

be

both

inte

rnal

ly e

quita

ble

and

exte

rnal

lyco

mpe

titiv

e –

our d

esig

n ap

proa

ch is

con

sist

ent f

or a

ll em

ploy

ees

but o

utco

mes

may

be

diffe

rent

Pe

er

gro

up

(s)

Pee

r gro

ups

will

focu

s on

the

orga

niza

tions

that

NLP

hire

s pe

ople

from

and

lose

s pe

ople

to

and

may

be

diffe

rent

for d

iffer

ent e

mpl

oyee

gro

ups

in o

rder

to m

aint

ain

rele

vanc

e

Fle

xib

ilit

yFl

exib

ility

iske

y t

o N

LP

’s s

ucce

ss a

nd

ou

r re

wa

rd p

rogra

ms a

re d

esig

ned

with

th

is in m

ind

–

man

ager

s w

ill be

hav

e st

ruct

ured

dis

cret

ion

over

rew

ard

deci

sion

s an

d on

goin

g m

anag

emen

t

© 2

013

Tow

ers

Wat

son.

All

right

s re

serv

ed.


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

2.

Jo

b e

valu

ati

on

an

d g

rad

ing

S

ince

NLP

is c

omfo

rtabl

e w

ith th

e H

ay jo

b ev

alua

tion

met

hodo

logy

, we

sugg

est t

hat y

ou

reta

in th

e m

etho

dolo

gy b

ut a

men

d:

The

job

eval

uatio

n la

ngua

ge, t

o en

sure

that

it c

aptu

res

the

wha

t it i

s th

at N

LP v

iew

s as

mos

t im

porta

nt fr

om a

job

sizi

ng p

ersp

ectiv

e (d

o yo

u us

e th

e fu

ll ra

nge

of o

ptio

ns

avai

labl

e un

der e

duca

tion

for e

xam

ple

–fro

m s

choo

l lea

ver t

o M

BA

grad

uate

)

The w

eig

hting o

f th

e f

acto

rs,

to e

nsure

that

job e

valu

ation “

score

s”

are

not

bia

sed

tow

ard

s “

managem

ent”

jobs (

we o

ften f

ind that

the a

ccounta

bili

ty facto

r can o

verp

lay

the

impo

rtanc

e of

peo

ple

man

agem

ent v

s. d

eep

tech

nica

l exp

ertis

e)

The

num

ber o

f gra

des

and

the

poin

t bou

ndar

ies

asso

ciat

ed w

ith e

ach

grad

e, to

im

prov

e gr

ade

dist

ribut

ion

(the

spre

ad o

f job

s ac

ross

the

grad

es)

–D

rop

curre

nt b

ands

1 a

nd 2

and

wid

en th

e po

int r

ange

s fo

r the

rem

aini

ng g

rade

s

Com

mun

icat

e th

e re

vise

d gr

adin

g st

ruct

ure

usin

g si

mpl

e gr

ade

desc

ripto

rs

Fe

wer

and

bro

ader

gra

des

supp

orte

d by

the

deve

lopm

ent o

f gra

de d

escr

ipto

rs th

at

offe

r a ta

ngib

le d

istin

ctio

n be

twee

n gr

ades

will

eas

e a

lot o

f the

pre

ssur

e on

gra

ding

D

evel

op a

stra

tegy

to c

omm

unic

ate

the

revi

sed

grad

es to

the

orga

niza

tion

© 2

013

Tow

ers

Wat

son.

All

right

s re

serv

ed.


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

3.

Ba

se p

ay

A

lign

the

base

pay

stru

ctur

e to

the

revi

sed

grad

ing

stru

ctur

e

Rem

ove

the

sub-

band

s (5

T, 6

L an

d 6T

) –th

ey c

reat

e un

nece

ssar

y ad

min

istra

tion

for

very

littl

e re

turn

giv

en th

e la

ck o

f diff

eren

tiatio

n fro

m th

e or

igin

al b

ands

5 a

nd 6

(alth

ough

w

e ap

prec

iate

that

this

was

not

his

toric

ally

the

case

)

Dev

elop

var

iabl

e w

idth

pay

rang

es (s

ee th

e fo

llow

ing

page

) tha

t bal

ance

:

Cos

t con

trol –

narro

wer

pay

rang

es (i

.e. 3

0% -

40%

) for

juni

or le

vels

whe

re it

is

possib

le to o

bserv

e m

ore

of

a “

goin

g r

ate

”, a

nd

Fl

exib

ility

–w

ider

pay

rang

es (i

.e. 6

0%+)

for s

enio

r lev

els

whe

re th

ere

is m

ore

varia

bilit

y in

ext

erna

l mar

ket p

ay a

nd w

here

bro

ader

con

side

ratio

n of

, for

exa

mpl

e,

perfo

rman

ce (f

or e

xist

ing

empl

oyee

s) a

nd p

revi

ous

pay

(in th

e ca

se o

f new

hire

s)

need

s to

be

take

n in

to a

ccou

nt

Ret

ain

som

e ov

erla

p be

twee

n pa

y ra

nges

but

try

not t

o ex

ceed

50%

-an

y m

ore

mak

es it

di

fficu

lt to

man

age

pay

prog

ress

ion

with

pro

mot

ion

from

one

gra

de to

the

next

(and

po

tent

ially

con

tribu

tes

to p

erce

ptio

ns o

f ine

quity

)

For

bro

ader

pay r

anges,

consid

er

the im

ple

menta

tion o

f “m

ark

et

anchors

” to

pro

vid

e

guid

ance

to p

eopl

e m

anag

ers

with

resp

onsi

bilit

y fo

r pay

dec

isio

ns

Dev

elop

com

mun

icat

ion

mat

eria

ls to

sup

port

the

impl

emen

tatio

n an

d on

goin

g go

vern

ance

/ m

anag

emen

t of t

he n

ew p

ay ra

nges

© 2

013

Tow

ers

Wat

son.

All

right

s re

serv

ed.


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

3.

Ba

se p

ay –

develo

pin

g v

ari

ab

le w

idth

pa

y r

an

ges

© 2

013

Tow

ers

Wat

son.

All

right

s re

serv

ed.

Va

ria

ble

ran

ge

s s

up

po

rt c

ho

ice

aro

un

d t

he

fle

xib

ilit

y r

eq

uir

ed

to

ap

pro

pri

ate

ly m

an

ag

e p

ay a

t

dif

fere

nt

levels

in

th

e o

rgan

izati

on

; fo

cu

sin

g o

n n

arr

ow

“m

ark

et

rate

s” a

t ju

nio

r le

vels

an

d

bro

ad

en

ing

ou

t to

re

fle

ct

bo

th e

xte

rna

l a

nd

in

tern

al c

on

sid

era

tio

ns a

t s

en

ior

leve

ls

Pro

ce

ss

•D

efin

e gr

ades

(usi

ng th

e re

vise

d jo

b ev

alua

tion

met

hodo

logy

)•

Obt

ain

mar

ket d

ata

on b

ench

mar

k jo

bs

•G

rou

p s

imila

rly “

va

lue

d”

po

sitio

ns in

to le

ve

ls a

nd

de

fin

e r

an

ge

mid

po

ints

•C

reat

e va

ried

wid

th ra

nges

aro

und

mid

poin

tsas

app

ropr

iate

•D

raft

guid

elin

es to

ass

ist m

anag

ers

in d

eter

min

ing

pay

incr

ease

s

Ad

va

nta

ge

sD

isa

dva

nta

ge

s

•R

efle

cts

logi

cal p

ay p

ract

ice

•S

uppo

rts a

less

hie

rarc

hica

l org

aniz

atio

nal

stru

ctur

e•

Mor

e fle

xibi

lity

to b

alan

ce in

tern

al e

quity

nee

ds

rela

tive

to m

arke

t lev

els

•P

rovi

des

som

e co

ntro

l ove

r cos

ts•

Allo

ws

man

ager

s m

ore

flexi

bilit

y to

diff

eren

tiate

pa

y in

crea

ses

base

d on

per

form

ance

and

co

ntrib

utio

n•

Red

uces

bar

riers

to d

evel

opm

enta

l mov

es•

Sup

ports

bro

ader

role

s

•P

rovi

des

less

stru

ctur

e th

an n

arro

w ra

nges

•R

equi

res

man

ager

s w

ho a

re s

kille

d in

usi

ng

mar

ket d

ata

inm

akin

g pa

y de

cisi

ons

and

able

to

sup

port

an e

ffect

ive

perfo

rman

ce

man

agem

ent p

roce

ss•

Put

s pr

essu

re o

n pe

rform

ance

eva

luat

ion

syst

ems

•P

oten

tially

redu

ces

the

scop

e fo

r pro

mot

ion

(few

er a

nd b

road

er ra

nges

mea

n m

ore

diffe

rent

iatio

n w

ithin

eac

h ra

nge)


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

4.

Pe

rfo

rman

ce m

an

ag

em

en

t

D

evel

op a

new

per

form

ance

man

agem

ent r

atin

g sc

ale

with

eith

er 4

or 5

ratin

gs:

If

4 –

one

nega

tive

/ dev

elop

men

tal a

nd th

ree

posi

tive

If

5 –

one

nega

tive,

one

dev

elop

men

tal a

nd th

ree

posi

tive

D

evel

op ra

ting

labe

ls a

nd d

escr

ipto

rs th

at s

uppo

rt th

e m

essa

ges

that

you

wan

t to

get

acro

ss –

avoi

d th

e us

e of

pas

sive

lang

uage

for e

mpl

oyee

s w

ho m

eet p

erfo

rman

ce

expe

ctat

ions

In

trodu

ce p

erfo

rman

ce d

istri

butio

n gu

idel

ines

(with

roug

hly

5% e

mpl

oyee

s ei

ther

falli

ng

belo

w e

xpec

tatio

ns o

r dev

elop

ing,

65%

-75

% m

eetin

g ex

pect

atio

ns, a

nd 2

0% to

30%

ex

ceed

ing

expe

ctat

ions

)

Rev

ise

the

exis

ting

perfo

rman

ce m

anag

emen

t pro

cess

and

doc

umen

ts to

acc

omm

odat

e th

e ne

w ra

ting

scal

e

Pro

cess

: bui

ld in

tim

e fo

r cal

ibra

tion

mee

tings

D

ocum

ents

: alig

n to

the

new

ratin

g sc

ale

D

evel

op m

anag

er a

nd e

mpl

oyee

com

mun

icat

ion

mat

eria

ls to

sup

port

the

impl

emen

tatio

n an

d on

goin

g su

cces

s of

the

revi

sed

perfo

rman

ce m

anag

emen

t app

roac

h

© 2

013

Tow

ers

Wat

son.

All

right

s re

serv

ed.


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

4.

Pe

rfo

rman

ce m

an

ag

em

en

t

C

omm

unic

ate

conf

irmed

yea

r-end p

erf

orm

ance r

atings t

o e

mplo

yees t

o e

mbed N

LP

’s

com

mitm

ent t

o pe

rform

ance

diff

eren

tiatio

n an

d th

e va

lue

plac

ed o

n hi

gh p

erfo

rman

ce

Stre

ngth

en th

e lin

k be

twee

n co

nfirm

ed p

erfo

rman

ce ra

tings

and

pay

(see

nex

t pag

e)

© 2

013

Tow

ers

Wat

son.

All

right

s re

serv

ed.


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

5.

Pa

y f

or

perf

orm

an

ce

D

evel

op o

vera

ll bu

dget

reco

mm

enda

tion

in li

ght o

f the

ext

erna

l env

ironm

ent (

mar

ket a

nd

econ

omic

), re

gula

tory

requ

irem

ents

and

affo

rdab

ility

M

odel

ann

ual m

erit

awar

ds b

ased

on

the

expe

cted

dis

tribu

tion

of p

erfo

rman

ce

sugg

este

d to

man

ager

s (s

ee p

age

9, th

ird m

ain

bulle

t) an

d po

sitio

n in

pay

rang

e

Assu

min

g “

on

ta

rge

t” p

erf

orm

an

ce

fo

r a

n e

mp

loye

e w

ho

is w

ell

po

sitio

ne

d in

th

eir p

ay

rang

e re

sults

in a

n in

crea

se in

line

with

bud

get,

and

A

imin

g for

1.5

x d

iffe

rentia

tion b

etw

een “

on t

arg

et”

and h

igh p

erf

orm

ance (

i.e.

3%

for

“on t

arg

et”

perf

orm

ance a

nd 4

.5%

for

hig

h p

erf

orm

ance)

P

rovi

de m

anag

ers

with

mer

it aw

ard

budg

ets

base

d on

the

mod

eled

mer

it m

atrix

D

evel

op m

anag

er a

nd e

mpl

oyee

com

mun

icat

ion

mat

eria

ls to

sup

port

the

impl

emen

tatio

n an

d on

goin

g su

cces

s of

the

revi

sed

pay

for p

erfo

rman

ce a

ppro

ach

P

ut m

ore

emph

asis

on

com

mun

icat

ing

pay

for p

erfo

rman

ce o

utco

mes

to e

mbe

d N

LP

’s

com

mitm

ent t

o pe

rform

ance

diff

eren

tiatio

n an

d th

e va

lue

plac

ed o

n hi

gh p

erfo

rman

ce

Dependin

g o

n t

he o

rganiz

ation’s

appetite

to incre

ase c

om

pen

sation c

osts

, develo

p a

nd

impl

emen

t a s

impl

e an

nual

ince

ntiv

e pl

an w

ith a

cor

pora

te p

erfo

rman

ce th

resh

old

© 2

013

Tow

ers

Wat

son.

All

right

s re

serv

ed.


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

En

d


CA-NP-199

Attachment D



Towers Watson

Salary Range Design Considerations

February 13, 2014

Ne

wfo

un

dla

nd

Po

wer

Sal

ary

rang

e de

sign

con

side

ratio

ns

To

m H

ellie

r

Vero

nic

a V

an

Fe

bru

ary

13

, 2

01

4

© 2

014

Tow

ers

Wat

son.

All

right

s re

serv

ed.

CA-NP-199, Attachment D Page 1 of 25

Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Co

nte

nts

B

ackg

roun

d an

d in

trodu

ctio

n

Met

hodo

logy

:

Dev

elop

ing

pay

rang

es fo

r con

side

ratio

n

Mar

ket d

ata

S

alar

y ra

nges

for c

onsi

dera

tion

M

arke

t pra

ctic

e:

Ann

ual i

ncen

tive

elig

ibili

ty a

nd ta

rget

aw

ard

leve

ls

Ret

entio

n aw

ards

Ap

pe

nd

ix

D

etai

led

mar

ket d

ata

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

2


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Bac

kg

rou

nd

an

d in

tro

du

cti

on

N

ewfo

undl

and

Pow

er (N

L P

ower

) has

ask

ed T

ower

s W

atso

n to

ass

ist w

ith th

e de

sign

of m

arke

t al

igne

d sa

lary

rang

es fo

r the

new

ban

ding

stru

ctur

e

As p

art

of o

ur

an

aly

sis

we

ha

ve

te

ste

d th

e “

fit”

of th

e n

ew

fiv

e b

an

d s

tru

ctu

re (

co

llap

se

d fro

m th

e

prev

ious

twel

ve b

and

stru

ctur

e) b

y re

fere

nce

to e

xter

nal m

arke

t dat

a an

d, th

roug

hout

this

doc

umen

t, w

e ha

ve s

ugge

sted

two

alte

rnat

ives

for y

ou to

take

into

acc

ount

prio

r to

final

izin

g th

e ba

ndin

g st

ruct

ure

and

corr

espo

ndin

g sa

lary

rang

es

In a

dditi

on to

the

sala

ry ra

nge

anal

ysis

, com

men

tary

has

bee

n pr

ovid

ed o

n ex

tern

al m

arke

t pra

ctic

e re

gard

ing:

H

ow to

man

age

pay

for m

anag

ers

and

dire

ct re

ports

who

sit

in a

com

mon

ban

d, a

nd

App

roac

hes

to m

anag

ing

rete

ntio

n co

ncer

ns

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

3


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Me

tho

do

log

y

Dev

elo

pin

g p

ay r

an

ges f

or

co

nsid

era

tio

n (

1)

P

rinci

pally

, thi

s ha

s in

volv

ed re

view

ing

“ge

o-a

dju

ste

d”

(se

e p

ag

e 6

) m

id-m

arke

t (m

edia

n) d

ata

from

bo

th g

ener

al in

dust

ry a

nd e

nerg

y an

d ut

ilitie

s co

mpa

rato

r gro

ups

with

a v

iew

to a

ncho

ring

sala

ry

rang

es th

at a

re m

arke

t alig

ned

whi

le a

lso

cons

ider

ing

inte

rnal

equ

ity a

cros

s di

ffere

nt ro

les

with

in e

ach

new

ban

d

Follo

win

g ou

r dis

cuss

ions

with

you

, we

have

iden

tifie

d tw

o op

tions

for s

alar

y ra

nges

for c

ompa

rison

:

Opt

ion

1 –

one

rang

e pe

r ban

d –

ba

se

d o

n a

“o

ne-s

ize

fits a

ll a

pp

roa

ch

”

O

ptio

n 2

–m

ultip

le ra

nges

per

ban

d –

allo

catio

n to

eac

h ra

nge

is b

ased

on

each

role

ch

arac

teris

tics,

acc

ount

abili

ties

and

resp

onsi

bilit

ies

(i.e.

, sup

ervi

sory

/ m

anag

emen

t, pr

ofes

sion

al,

tech

nica

l sup

port

and/

or b

usin

ess

supp

ort)

P

lease n

ote

both

range s

tructu

res a

re a

ligned to the n

ew

fiv

e b

and s

tructu

re a

nd N

L P

ow

er’

s

pre

ferr

ed

“8

0%

to

10

0%

” p

ay s

tru

ctu

re m

od

el

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

4


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

N

L P

ower

pre

limin

ary

band

ing

stru

ctur

e:

Me

tho

do

log

y

Dev

elo

pin

g p

ay r

an

ges f

or

co

nsid

era

tio

n (

2)

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

5

Su

pe

rvis

ory

/

Ma

na

ge

me

nt

Pro

fess

ion

al

Te

ch

nic

al

Su

pp

ort

Bu

sin

ess

Su

pp

ort

Ba

nd

5M

2 - M

anag

er /

M3

- Sr.

Man

ager

P4

- Spe

cial

ist /

P

5 - M

aste

r

Ba

nd

4M

2 - M

anag

erP

4 - S

peci

alis

t

Ba

nd

3M

1 - S

uper

visor

P3

- Car

eer

T4 -

Lead

Ba

nd

2P

1 - E

ntry

/ P

2 -

Inte

rmed

iate

T3 -

Sen

ior

U3

- Sen

ior

Ba

nd

1U

2 - I

nter

med

iate

NL

P B

an

ds

TW

Ca

ree

r L

eve

ls


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Me

tho

do

log

y

Ma

rke

t d

ata

C

om

pe

titive

ma

rke

t d

ata

ha

s b

ee

n s

ou

rce

d fro

m T

ow

ers

Wa

tso

n’s

:

20

13 C

anad

ian

Gen

eral

Indu

stry

and

Mid

dle

Man

agem

ent,

Pro

fess

iona

l and

Sup

port

Com

pens

atio

n S

urve

y, a

nd

20

13 E

nerg

y C

ompe

nsat

ion

Sur

vey

M

arke

t dat

a ha

s be

en a

djus

ted

by a

n an

nual

ized

agi

ng fa

ctor

of 2

.9%

to re

flect

the

prev

ailin

g ra

te o

f sa

lary

incr

ease

repo

rted

in 2

013

and

for 2

014

Th

e da

ta h

as a

lso

been

dis

coun

ted

by a

fact

or o

f 5.0

% to

refle

ct th

e ge

ogra

phic

sal

ary

diffe

rent

ial

obse

rved

bet

wee

n th

e N

ewfo

undl

and

labo

ur m

arke

t and

that

acr

oss

Can

ada

natio

nally

. Thi

s di

scou

nt

is b

ased

on

both

Eco

nom

ic R

esea

rch

Inst

itute

(ER

I) da

ta a

ccur

ate

as o

f Feb

ruar

y 20

14, a

nd o

ur o

wn

obse

rvat

ions

of t

he p

ay d

iffer

entia

ls re

porte

d in

our

sur

vey

data

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

6


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Sala

ry r

an

ge o

pti

on

s f

or

co

nsid

era

tio

n

A

s hi

ghlig

hted

ear

lier i

n th

is d

ocum

ent,

two

pote

ntia

l sal

ary

rang

e st

ruct

ures

are

pre

sent

ed o

ver t

he

follo

win

g pa

ges:

O

pti

on

1 (

On

e-s

ize

fit

s a

ll)

–1

rang

e w

ithin

eac

h ba

nds

with

sal

ary

rang

es s

et a

t 80%

to 1

00%

of

mar

ket m

edia

n da

ta

Op

tio

n 2

(M

ult

iple

ran

ges p

er

ban

d)

–11

rang

es w

ithin

5 b

ands

with

sal

ary

rang

es b

uilt

for e

ach

leve

l of r

espo

nsib

ility

(i.e

., su

perv

isor

y / m

anag

emen

t, pr

ofes

sion

al, t

echn

ical

sup

port

and/

or

busi

ness

sup

port)

. S

alar

y ra

nges

set

at 8

0% to

100

% o

f mar

ket m

edia

n da

ta

From

pag

e 9

onw

ards

we

prov

ide

obse

rvat

ions

on

the

fit o

f eac

h op

tion

put f

orw

ard

for c

onsi

dera

tion

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

8


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Ge

ne

ral o

bserv

ati

on

s

A

s di

scus

sed

over

the

cour

se o

f the

pas

t few

mon

ths,

Tow

ers

Wat

son

typi

cally

vie

ws

an 8

0% to

100

%

sala

ry ra

nge

as o

verly

rest

rictiv

e –

pa

rtic

ula

rly w

he

n “

ma

rke

t” (

in th

is in

sta

nce

me

dia

n)

is r

efle

cte

d in

the

rang

e m

axim

um. W

e re

com

men

d a

110%

max

imum

as

this

is th

e no

rm in

the

mar

ket a

nd w

ould

al

so a

llevi

ate

empl

oyee

s fa

lling

abo

ve th

e ra

nge

max

imum

E

vide

nce

of th

is c

an b

e se

en o

n pa

ges

10 a

nd 1

1, w

here

we

see

the

maj

ority

of e

mpl

oyee

s fa

lling

ab

ove

the

sugg

este

d ra

nge

max

imum

Acro

ss a

ll o

ptio

ns, N

L P

ow

er’

s a

gg

reg

ate

co

mp

a-r

atio

(acr

oss

all b

ands

) app

ears

to s

how

reas

onab

le

alig

nmen

t to

mar

ket.

How

ever

, the

re is

sig

nific

ant v

aria

bilit

y in

alig

nmen

t by

band

:

Ban

d 1

is c

onsi

sten

tly h

ighe

r tha

t wha

t we

wou

ld c

onsi

der t

o be

a m

arke

t com

petit

ive

rang

e of

ar

ound

+/-1

0% o

f tar

get m

arke

t pos

ition

(50t

hpe

rcen

tile)

. Uni

on e

quity

inte

rnal

ly s

uppo

rts th

e us

e of

an

anch

or fo

r thi

s ba

nd th

ereb

y in

crea

sing

the

rang

e m

axim

um fr

om th

at n

oted

B

ands

2 a

nd 3

rem

ain

cons

iste

ntly

with

in th

e m

arke

t ran

ge

How

ever

, com

petit

ive

posi

tioni

ng s

lips

for h

ighe

r ban

ds (i

.e.,

4 an

d 5)

gen

eral

ly d

ue to

a w

ider

di

ffere

ntia

ls in

the

mar

ket d

ata

repo

rted

for r

oles

in th

ose

band

s

Mar

ket p

ay is

typi

cally

hig

her a

cros

s al

l ban

ds fo

r tec

hnic

al ro

les

incl

udin

g eq

uipm

ent m

aint

enan

ce

and

elec

trica

l equ

ipm

ent e

ngin

eerin

g (s

ee A

ppen

dix

for f

urth

er d

etai

ls)

E

nerg

y an

d ut

ilitie

s in

dust

ry d

ata

has

been

con

side

red

in th

e de

velo

pmen

t of e

ach

of th

e op

tions

pr

esen

ted

from

pag

e 10

. How

ever

, the

mar

ket r

efer

ence

rate

s ar

e ty

pica

lly c

lose

r to

the

gene

ral

indu

stry

dat

a

Ple

ase

note

that

the

sala

ry ra

nge

optio

ns h

ave

been

dev

elop

ed e

xclu

ding

dat

a fo

r leg

al ro

les

whi

ch

are

paid

sig

nific

antly

hig

her,

in m

ost i

nsta

nces

, tha

n ot

her r

oles

in th

e or

gani

zatio

n

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

9


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Sala

ry r

an

ge o

pti

on

s f

or

co

nsid

era

tio

n

Op

tio

n 1

(o

ne r

an

ge p

er

ban

d)

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

10

Ove

rvie

w

Num

ber o

f sal

ary

band

s5

Num

ber o

f sal

ary

rang

es5

Ban

d m

inim

um –

max

imum

(a

s a

% o

f m

ark

et

refe

ren

ce

po

int)

80%

-10

0%**

mar

ketr

efer

ence

rate

is s

et to

rang

e m

ax

imu

m

Ba

nd

To

tal

Ba

nd

1B

an

d 2

Ba

nd

3B

an

d 4

Ba

nd

5

# B

elow

rang

e3

-1

2-

-

# In

rang

e17

39

5161

2329

#A

bove

rang

e74

**4*

*46

**23

**-

1**

Ave

rage

com

pa-ra

tio(a

s a

% o

f m

ark

et re

fere

nce

po

int)

96%

95%

98%

97%

88%

92%

Ap

prox

imat

ely

31%

of i

ncum

bent

s fa

ll ou

tsid

e of

thei

r sal

ary

rang

e in

this

mod

el

30%

of a

ll in

cum

bent

s –

the

maj

ority

of w

ho s

it in

ban

ds 2

and

3 –

fall

abov

e th

e ra

nge

max

imum

Th

e ag

greg

ate

com

pa-r

atio

of 9

6% is

reas

onab

le. H

owev

er, m

arke

t com

petit

iven

ess

appe

ars

to s

lip in

ban

d 4

Qu

es

tio

n f

or

dis

cu

ss

ion

:is

a o

ne s

ize

fits

all a

ppro

ach

the

best

fit f

or N

L P

ower

?

Min

Ma

x

Ba

nd

5$9

6$1

20

Ba

nd

4$8

8$1

10

Ba

nd

3$7

2$9

0

Ba

nd

2$6

0$7

5

Ba

nd

1$4

0$5

0

NL

Po

we

r

Po

ten

tia

l S

ala

ry

Ra

ng

es $6

0*

*Un

ion

eq

uit

y a

nc

ho

r re

co

mm

en

de

d. W

ill re

du

ce

co

mp

a-r

ati

o a

nd

th

e n

um

be

r o

f e

mp

loy

ee

s a

bo

ve

ran

ge

**A

11

0%

ma

xim

um

is

mo

re t

yp

ica

l in

th

e m

ark

et

an

d w

ou

ld r

ed

uc

e t

he

nu

mb

er

of

em

plo

ye

es

fa

llin

g a

bo

ve

ran

ge


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Ove

rvie

w

Num

ber o

f sal

ary

band

s5

Num

ber o

f sal

ary

rang

es11

Band

min

imum

–m

axim

um

(as a

% o

f m

ark

et

refe

rence p

oin

t)

80%

-10

0%**

mar

ketr

efer

ence

rate

is s

et to

rang

e m

ax

imu

m

Ba

nd

To

tal

Ba

nd

1B

an

d 2

Ba

nd

3B

an

d 4

Ba

nd

5

# Be

low

rang

e3

--

1-

2

# In

rang

e16

09

4456

2328

#Ab

ove

rang

e86

**4*

*53

**29

**-

-

Aver

age

com

pa-r

atio

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% o

f m

ark

et re

fere

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%90

%90

%

Sala

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an

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on

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or

co

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tio

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tio

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ult

iple

ran

ges p

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ban

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tow

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m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

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rved

.

11

Su

pe

rvis

ory

/

Ma

na

ge

me

nt

Pro

fess

ion

al

Te

ch

nic

al

Su

pp

ort

Bu

sin

ess

Su

pp

ort

Ba

nd

5$1

00 -

$125

$96

- $12

0

Ba

nd

4$8

8 - $

110

$84

- $10

5

Ba

nd

3$7

2 - $

90$6

8 - $

85$7

2 - $

90

Ba

nd

2$6

0 - $

75$5

6 - $

70$4

4 - $

55

Ba

nd

1$3

6 - $

45

NL

P B

an

ds

Po

ten

tia

l S

ala

ry R

an

ge

s ($

000s)

Ap

prox

imat

ely

35%

of i

ncum

bent

s fa

ll ou

tsid

e of

thei

r sal

ary

rang

e in

this

mod

el

33%

of a

ll in

cum

bent

s –

the

maj

ority

of

who

sit

in b

ands

2 a

nd 3

–fa

ll ab

ove

the

rang

e m

axim

um

The

aggr

egat

e co

mpa

-rat

io o

f 98%

is

reas

onab

le

*Un

ion

eq

uit

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nc

ho

r re

co

mm

en

de

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ill re

du

ce

co

mp

a-r

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o a

nd

th

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um

be

r o

f e

mp

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s a

bo

ve

ran

ge

$60*

$66*

**A

11

0%

ma

xim

um

is

mo

re t

yp

ica

l in

th

e m

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et

an

d w

ou

ld r

ed

uc

e t

he

nu

mb

er

of

em

plo

ye

es

fa

llin

g a

bo

ve

ran

ge


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

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na

gin

g w

ith

in s

ala

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an

ges c

an

be c

om

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d…

tow

ersw

atso

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m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

12

Th

ere

are

a nu

mbe

r of o

ptio

ns o

pen

to c

onsi

der w

hen

man

agin

g m

anag

er /

dire

ct re

port

pay

with

in a

si

ngle

ban

d. H

owev

er, b

ased

on

our o

bser

vatio

ns o

f ext

erna

l pra

ctic

e, w

e ca

n na

rrow

the

rang

e of

op

tions

dow

n to

thre

e:

Op

tio

n 1

–de

term

ine

a pa

y di

ffere

ntia

l pol

icy

line

that

sta

tes,

for e

xam

ple,

that

man

ager

s w

ill b

e co

nsis

tent

ly b

e pa

id x

% m

ore

than

thei

r dire

ct re

ports

–P

ros

–si

mpl

e to

adm

inis

ter a

nd c

omm

unic

ate

–C

ons

–d

oe

sn

’t a

lwa

ys r

efle

ct m

ark

et d

ata

–pa

rticu

larly

for t

echn

ical

spe

cial

ist r

oles

whi

ch

incr

easi

ngly

com

man

d hi

gher

mar

ket p

ay th

an tr

aditi

onal

man

agem

ent r

oles

O

pti

on

2 –

deve

lop

com

pete

ncy

prof

iles

that

cle

arly

illu

stra

te th

e di

ffere

nt re

quire

men

ts o

f in

divi

dual

con

tribu

tor a

nd m

anag

emen

t rol

es w

ithin

eac

h ba

nd to

exp

lain

why

how

jobs

at t

he

sam

e le

vel c

an h

ave

a re

porti

ng re

latio

nshi

p–

Pro

s –

allo

ws

clos

er a

lignm

ent t

o yo

ur s

tate

d co

mpe

nsat

ion

philo

soph

y an

d th

e m

arke

t tha

n op

tion

1–

Con

s –

can

be d

iffic

ult f

or H

R to

com

mun

icat

e an

d m

anag

ers

to a

ccep

t

Op

tio

n 3

–di

ffere

ntia

te s

alar

y ra

nges

for d

iffer

ent e

mpl

oyee

gro

ups

(cou

ld b

e in

divi

dual

co

ntrib

utor

s an

d m

anag

ers

or o

ther

s)–

Pro

s –

allo

ws

clos

est p

ossi

ble

alig

nmen

t to

mar

ket

–C

ons

–co

uld

be p

erce

ived

as

less

equ

itabl

e. C

ould

resu

lt in

incr

ease

d fix

ed c

osts

if s

ome

rang

es a

re p

ositi

oned

hig

her t

han

they

wou

ld b

e un

der t

he o

ne s

ize

fits

all a

ppro

ach


Ma

rke

t p

rac

tic

e:

Re

ten

tio

n a

wa

rds

© 2

014

Tow

ers

Wat

son.

All

right

s re

serv

ed.

An

nu

al in

ce

nti

ves a

nd

re

ten

tio

n a

wa

rds


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

An

nu

al in

cen

tive e

lig

ibilit

y a

nd

targ

et

aw

ard

levels

© 2

013

Tow

ers

Wat

son.

All

right

s re

serv

ed.

B

ased

on

high

-leve

l ana

lysi

s fo

r the

ben

chm

ark

jobs

, NLP

app

ears

to b

e be

hind

mar

ket

on v

aria

ble

(mer

it pa

ymen

t) pa

y:

In th

e m

arke

t, jo

bs a

t all

band

s ar

e ty

pica

lly e

ligib

le to

rece

ive

som

e fo

rm o

f var

iabl

e pa

y (n

orm

ally

an

annu

al in

cent

ive)

Ta

rget

aw

ard

leve

ls v

ary

from

app

roxi

mat

ely

5% fo

r cur

rent

ban

d 2

jobs

to

appr

oxim

atel

y 15

% fo

r ban

d 8

jobs

(alth

ough

pla

n m

echa

nics

ofte

n m

ean

that

hig

h pe

rform

ers

are

able

to a

chie

ve 1

.5x

to 2

x ta

rget

)

The

data

pre

sent

ed b

elow

sho

uld

be c

onsi

dere

d to

geth

er w

ith th

e m

arke

t bas

e pa

y da

ta

in d

eter

min

ing

whe

ther

ther

e is

an

appe

tite

inte

rnal

ly to

:

Am

end

the

mix

of f

ixed

and

var

iabl

e pa

y, a

nd

Intro

duce

a m

ore

form

al, t

arge

t bas

ed, a

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entiv

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© 2

014

Tow

ers

Wat

son.

All

right

s re

serv

ed.

14


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Th

e p

rob

lem

wit

h u

sin

g p

ay t

o r

eta

in p

eo

ple

…

Pay t

o

reta

in

pe

op

le

It m

akes

you

a m

arke

t fo

llo

we

r–

not a

m

arke

t lea

der

Lo

w R

OI–

ther

e ar

e m

uch

chea

per w

ays

to

achi

eve

sust

aina

ble

enga

gem

ent

A do

llar i

s a

dolla

r –an

yone

can

mat

ch

your

pay

leve

ls, b

ut

no

on

e c

an

ma

tch

yo

ur

EV

PD

o ge

t pay

righ

t, bu

t an

ythi

ng m

ore

and

wat

ch th

ose

ma

rgin

al

retu

rns d

imin

ish

Pay

mig

ht m

ake

your

pe

ople

sta

y bu

t it

do

es

n’t

ma

ke

th

em

m

ore

en

ga

ge

dor

in

crea

se th

eir

perfo

rman

ce

Usi

ng b

ase

pay

as a

so

lutio

n s

tok

es

yo

ur

futu

re c

os

t

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

15


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

O

ur re

sear

ch s

ugge

sts

that

whi

le p

ay is

the

num

ber o

ne d

river

of e

mpl

oyee

attr

actio

n an

d re

tent

ion,

it’s

sig

nific

ance d

rop

s a

s a

drive

r o

f e

ng

ag

em

ent a

s n

on

-pay

fact

ors

beco

me

muc

h m

ore

impo

rtant

:

…S

olu

tio

ns f

or

en

ga

gin

g a

nd

reta

inin

g y

ou

r em

plo

yees

Wor

k ou

t you

r Tot

al

Rew

ards

RO

I

•S

pend

you

r do

llars

whe

re th

ey

mak

e m

ost

impa

ct—

do y

ou

know

whe

re th

is

is?

•Fo

cus

on

prog

ram

mes

that

cr

eate

sus

tain

able

en

gage

men

t, no

t ju

st th

ough

t tha

t m

ake

peop

le s

tay

beca

use

they

ca

n’t a

ffo

rd to

le

ave

•M

ake

pay

dolla

rs

wor

k by

link

ing

to

perfo

rman

ce

Up

the

gam

e of

yo

ur m

anag

ers

•Ti

me

to lo

ok a

t m

anag

er

capa

bilit

ies

•H

ow w

ell d

o yo

u eq

uip

man

ager

s to

dea

l with

ch

ange

?

Get

real

ly g

ood

at

com

mun

icat

ing

your

rew

ards

•It

’s f

ree

mo

ne

y—

empl

oyee

s va

lue

wha

t the

y un

ders

tand

•B

e cl

ear a

bout

yo

ur e

mpl

oyee

va

lue

prop

ositi

on

Enc

oura

ge c

aree

r de

velo

pmen

t

•G

et jo

b de

sign

rig

ht s

o th

at

peop

le fe

el th

ey

have

a ro

le in

w

hich

they

can

be

thei

r bes

t•

Focu

s on

diff

eren

t ty

pes

of

deve

lopm

ent a

nd

grow

th: m

ultip

le

mod

els

of

succ

ess

•S

top

over

prom

isin

g an

d un

der-

deliv

erin

g: b

e cl

ear a

bout

the

“giv

e-g

et”

Red

uce

stre

ss,

enco

urag

e w

elln

ess

•R

evie

w y

our

proc

ess

for

mat

chin

g w

orkf

orce

pl

anni

ng to

bu

sine

ss n

eed

•In

nova

te a

roun

d w

elln

ess

prog

ram

s•

Kee

p re

finin

g fle

xibl

e w

orki

ng

prac

tices

: lin

k to

m

anag

er

capa

bilit

ies

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

16


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Rete

nti

on

pro

gra

ms f

or

key t

ale

nt

(1)

C

ompe

nsat

ion

base

d re

tent

ion

prog

ram

s ar

e co

mm

only

use

d w

hen

orga

niza

tions

are

U

nder

goin

g si

gnifi

cant

rest

ruct

urin

g an

d/or

tran

sfor

mat

ion

(whe

ther

to a

chie

ve h

eadc

ount

re

duct

ion

or n

ot),

In

volv

ed in

mer

ger,

acqu

isiti

on o

r div

estit

ure

activ

ity th

at is

like

ly to

resu

lt in

sig

nific

ant

orga

niza

tiona

l cha

nge,

or

Fa

ced

with

losi

ng c

ritic

al s

kill

empl

oyee

s du

e to

sca

rcity

of s

kills

and

agg

ress

ive

com

petit

ion

Th

e du

ratio

n of

the

rete

ntio

n ve

hicl

e of

ten

varie

s:

Mos

t lon

g-te

rm a

ppro

ache

s ba

lanc

e th

e ne

ed to

take

imm

edia

te a

ctio

n w

ith a

long

er-te

rm s

trate

gy

that

em

ploy

s bo

th fi

nanc

ial a

nd n

on-fi

nanc

ial i

nter

vent

ions

; whe

reas

S

hort-

term

app

roac

hes

tend

focu

s m

ore

on c

ash

base

d fin

anci

al in

terv

entio

ns w

ith im

med

iate

, st

aged

or d

efer

red

paym

ent

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

17


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Rete

nti

on

pro

gra

ms f

or

key t

ale

nt

(2)

Th

e st

ruct

ure

of a

rete

ntio

n pr

ogra

ms

depe

nds

on th

e de

finiti

on o

f the

in-s

cope

pop

ulat

ion;

e.g

. w

ho/w

hat r

oles

it is

con

side

red

nece

ssar

y to

reta

in in

ord

er to

sec

ure

the

succ

ess

of tr

ansi

tiona

l/lon

g-te

rm b

usin

ess

obje

ctiv

es

Man

y or

gani

zatio

ns c

ontin

ue to

lim

it th

is to

mai

n bo

ard

mem

bers

, sen

ior e

xecu

tives

and

/or s

enio

r m

anag

emen

t

Incr

easi

ngly,

how

ever

, org

aniz

atio

ns a

re ta

king

a b

road

er v

iew

on

who

and

/or w

hat t

o fo

cus

the

rete

ntio

n ef

fort

on. T

his

mig

ht in

clud

e (b

ut is

not

lim

ited

to):

K

ey c

ontri

buto

rs a

nd/o

r tec

hnic

al e

xper

ts, t

ypic

ally

with

nic

he o

r sca

rce

skill

s;

Rol

es th

at a

re c

onsi

dere

d cr

itica

l to

deliv

erin

g on

key

bus

ines

s ob

ject

ives

;

Top

sale

s ro

les

or te

ams

that

pro

vide

a s

igni

fican

t pro

porti

on o

f rev

enue

, suc

h as

acc

ount

m

anag

ers;

Key

role

s or

team

s th

at a

re re

quire

d to

per

form

hig

h le

vels

of c

usto

mer

ser

vice

man

agem

ent o

r m

ain

ten

an

ce

, e

.g. e

nsu

rin

g “

bu

sin

ess a

s u

su

al” fo

r cu

sto

me

rs;

Th

ose

with

lead

ersh

ip p

oten

tial a

t mid

-leve

l; an

d/or

A

broa

d ra

nge

of in

divi

dual

s w

ho a

re g

ener

ally

reco

gniz

ed a

s be

ing

high

or t

op p

erfo

rmer

s ac

ross

a

rang

e of

func

tions

and

leve

ls o

f sen

iorit

y

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

18


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Rete

nti

on

pla

n d

esig

n o

bserv

ati

on

s (

1)

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

19

Pla

nP

ros

Co

ns

Gu

ara

nte

ed

bo

nu

s w

ith

in e

xis

tin

g

arr

an

gem

en

ts

Si

mpl

e an

d tra

nspa

rent

R

elat

ivel

y lo

w c

ost/c

ost n

eutra

l

Lim

ited u

psid

e for

“at risk”

indiv

iduals

U

nder

min

es a

ny in

divi

dual

per

form

ance

rela

ted

bonu

s

Easi

ly b

ough

t out

“P

ay t

o s

tay” r

ete

nti

on

bo

nu

s/e

qu

ity –

un

co

nd

itio

nal

Si

mpl

e an

d tra

nspa

rent

Si

gnal

s cl

ear r

eten

tion

inte

nt

Lim

ited

knoc

k-on

cos

t (re

tirem

ent,

soci

al

secu

rity

etc.

)

Can

be

scal

ed to

refle

ct re

tent

ion

need

N

o di

rect

link

to th

e ac

hiev

emen

t of k

ey

mile

ston

es o

r bus

ines

s ob

ject

ives

H

ighe

r cos

t

Easi

ly b

ough

t out

“P

ay t

o p

erf

orm

” r

ete

nti

on

bo

nu

s/e

qu

ity –

co

nd

itio

nal

As

abo

ve

Supp

orts

the

achi

evem

ent o

f key

bus

ines

s m

ilest

ones

and

obj

ectiv

es

Prov

ides

a s

afeg

uard

aga

inst

und

erpe

rform

ance

M

ay b

e ne

gativ

ely

perc

eive

d by

indi

vidu

als

who

ar

e al

read

y fa

cing

unc

erta

inty

H

ighe

r cos

t

Easi

ly b

ough

t out

En

han

ced

base p

ay a

rran

gem

en

ts

(vari

ed

term

)

Si

mpl

e an

d tra

nspa

rent

P

rovid

es a

regula

r boost fo

r “a

t risk”

indiv

iduals

N

o di

rect

link

to th

e ac

hiev

emen

t of k

ey

mile

ston

es o

r bus

ines

s ob

ject

ives

H

ighe

r cos

t –co

uple

d w

ith k

nock

-on

cost

s (r

etire

men

t, so

cial

sec

urity

etc

.)

Easi

ly b

ough

t out

En

han

ced

pen

sio

n a

rran

gem

en

ts

(/S

ER

Ps)

Si

gnal

s lo

nger

-term

com

mitm

ent

Po

tent

ially

hig

her v

alue

Le

ss s

traig

htfo

rwar

d to

buy

out

Ad

min

istra

tivel

y co

mpl

ex

Pote

ntia

lly h

ighe

r cos

t

Diff

icul

t to

link

to th

e ac

hiev

emen

t of k

ey

mile

ston

es o

r bus

ines

s ob

ject

ives

(eith

er y

ou g

et

it o

r you d

on’t)


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Rete

nti

on

pla

n d

esig

n o

bserv

ati

on

s (

2)

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

20

Pla

nP

ros

Co

ns

Earl

y r

eti

rem

en

t o

pp

ort

un

itie

s

(ag

e d

ep

en

den

t)

R

educ

ed ri

sk o

f une

mpl

oym

ent f

or th

ose

near

to

retir

emen

t

Perc

eive

d hi

gh v

alue

/rela

tivel

y lo

w c

ost

(dep

endi

ng o

n pr

ecis

e ar

rang

emen

ts)

M

ay s

uppo

rt ad

ditio

nal p

rogr

ams

arou

nd

deve

lopm

ent a

nd re

depl

oym

ent

Le

ss s

traig

htfo

rwar

d to

buy

out

Li

kely

to b

enef

it a

smal

l pop

ulat

ion

D

iffic

ult t

o lin

k to

the

achi

evem

ent o

f key

m

ilest

ones

or b

usin

ess

obje

ctiv

es (e

ither

you

get

it o

r you d

on’t)

N

o gu

aran

tee

of k

now

ledg

e tra

nsfe

r

En

han

ced

sev

era

nce

arr

an

gem

en

ts

Lu

mp

sum

ear

ning

s m

ay a

ppea

l to

empl

oyee

s w

ith re

ason

able

ext

erna

l job

pro

spec

ts

Tax

may

be

offs

et if

pay

men

t is

part

or fu

lly

trans

ferr

ed to

an

RR

SP

C

an c

ombi

ne a

num

ber o

f app

roac

hes;

ou

tpla

cem

ent,

train

ing,

pay

, ret

irem

ent e

tc.

Po

tent

ially

hig

her c

ost

C

an b

e bo

ught

out

, alth

ough

may

be

diffi

cult

to

valu

e ex

tern

ally

D

iffic

ult t

o lin

k to

the

achi

evem

ent o

f key

m

ilest

ones

or b

usin

ess

obje

ctiv

es

Care

er

dev

elo

pm

en

t/p

rom

oti

on

op

po

rtu

nit

ies (

inclu

din

g r

etr

ain

ing

an

d r

ed

ep

loym

en

t)

Li

kely

to a

ppea

l to

high

per

form

ing/

high

pot

entia

l em

ploy

ees

M

ay s

uppo

rt kn

owle

dge

trans

fer a

cros

s th

e or

gani

zatio

n

Pote

ntia

lly lo

w c

ost/c

ost n

eutra

l

R

equi

res

clar

ity a

roun

d op

en p

ositi

ons

R

equi

res

a po

tent

ially

sig

nific

ant t

ime

inve

stm

ent

Ea

sily

mat

ched

by

perc

eiva

bly

mor

e st

able

co

mpe

titor

s

Like

ly to

requ

ire a

dditi

onal

fina

ncia

l inc

entiv

es

No

perfo

rman

ce g

uara

ntee

s

Inte

rnati

on

al/re

gio

nal m

ob

ilit

y

op

po

rtu

nit

ies

Pr

ovid

es a

n op

portu

nity

to lo

ck k

ey in

divi

dual

sin

M

ay b

enef

it th

e bu

sine

ss m

ore

broa

dly

(kno

wle

dge

trans

fer e

tc.)

R

elat

ivel

y lo

w c

ost

Li

kely

to b

enef

it a

smal

l pop

ulat

ion

Em

ploy

ees

are

unlik

ely

to a

ppre

ciat

e no

n-co

mpe

nsat

ion

cost

s to

the

busi

ness

N

o pe

rform

ance

gua

rant

ees


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Deta

ile

d f

ind

ing

s

Ma

rke

t d

ata

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

22

Ban

d 1

25

P5

0P

75

P2

5P

50

P7

5P

All

fu

ncti

on

sIn

term

ed

iate

(U

2)

$41,

350

$46,

043

$51,

517

------

---

Fin

an

cia

l R

ep

ort

ing

Inte

rme

dia

te (

U2)

$42,

328

$44,

185

$50,

148

------

---

Be

nch

ma

rk /

Le

ve

l

2014 C

om

pe

titi

ve

Sa

lary

Ge

ne

ral

Ind

ust

ryE

ne

rgy

Ban

d 2

25

P5

0P

75

P2

5P

50

P7

5P

All

fu

ncti

on

sE

ntr

y (

P1)

/ In

term

ed

iate

(P

2)

$50,

930

$56,

845

$64,

616

------

---

Ap

pli

ca

tio

n D

ev

En

try (

P1)

/ In

term

ed

iate

(P

2)

$51,

419

$57,

724

$64,

176

$75,

280

$70,

199

$80,

762

Fin

an

cia

l R

ep

ort

ing

En

try (

P1)

/ In

term

ed

iate

(P

2)

$51,

517

$58,

360

$69,

846

$62,

999

$69,

924

$75,

330

Ele

ctr

ica

l E

qu

ip E

ng

En

try (

P1)

/ In

term

ed

iate

(P

2)

$63,

247

$76,

982

$83,

972

$73,

187

$81,

223

$84,

342

Eq

uip

me

nt

Ma

inte

na

nce

En

try (

P1)

/ In

term

ed

iate

(P

2)

$56,

502

$64,

469

$85,

780

$75,

962

$86,

875

$99,

816

All

fu

ncti

on

sS

en

ior

(T3)

$57,

480

$67,

158

$78,

302

------

---

Eq

uip

me

nt

Ma

inte

na

nce

Se

nio

r (T

3)

$61,

390

$75,

271

$95,

409

$86,

874

$97,

022

$111

,815

Ap

pli

ca

tio

n D

ev

Se

nio

r (T

3)

$61,

683

$71,

557

$83,

092

------

---

All

fu

ncti

on

sS

en

ior

(U3)

$48,

682

$54,

645

$61,

097

------

---

Fin

an

cia

l R

ep

ort

ing

Se

nio

r (U

3)

$47,

313

$55,

427

$64,

225

------

---

Be

nch

ma

rk /

Le

ve

l

2014 C

om

pe

titi

ve

Sa

lary

Ge

ne

ral

Ind

ust

ryE

ne

rgy


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Deta

ile

d f

ind

ing

s

Ma

rke

t d

ata

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

23

Ban

d 3

25

P5

0P

75

P2

5P

50

P7

5P

Eq

uip

me

nt

Ma

inte

na

nce

Le

ad

(T

4)

$72,

925

$99,

417

$112

,614

$106

,696

$114

,134

$120

,497

Ap

pli

ca

tio

n D

ev

Le

ad

(T

4)

$85,

927

$89,

935

$104

,011

------

---

All

fu

ncti

on

sL

ea

d (

T4)

$68,

429

$84,

167

$97,

951

------

---

All

fu

ncti

on

sC

are

er

(P3)

$70,

970

$77,

520

$87,

295

------

---

Ap

pli

ca

tio

n D

ev

Ca

ree

r (P

3)

$74,

098

$78,

986

$87,

686

$90,

100

$94,

287

$99,

135

Fin

an

cia

l R

ep

ort

ing

Ca

ree

r (P

3)

$71,

752

$80,

355

$92,

965

$81,

140

$91,

303

$101

,916

Ra

tes

Ca

ree

r (P

3)

$70,

579

$81,

234

$88,

762

$75,

308

$86,

961

$89,

208

Ele

ctr

ica

l E

qu

ip E

ng

Ca

ree

r (P

3)

$85,

731

$92,

867

$101

,567

$94,

305

$100

,814

$104

,588

Eq

uip

me

nt

Ma

inte

na

nce

Ca

ree

r (P

3)

$81,

528

$93,

649

$104

,402

$93,

969

$101

,672

$108

,748

All

fu

ncti

on

sS

up

erv

iso

r (M

1)

$67,

940

$77,

226

$90,

228

------

---

Fin

an

cia

l R

ep

ort

ing

Su

pe

rvis

or

(M1)

$74,

001

$82,

407

$106

,162

$105

,722

$108

,508

$129

,880

Eq

uip

me

nt

Ma

inte

na

nce

Su

pe

rvis

or

(M1)

$74,

783

$85,

145

$107

,726

$112

,296

$131

,480

$139

,092

Ele

ctr

ica

l E

qu

ip E

ng

Su

pe

rvis

or

(M1)

$84,

460

$88,

859

$111

,441

------

---

Ap

pli

ca

tio

n D

ev

Su

pe

rvis

or

(M1)

$83,

190

$93,

552

$106

,357

$112

,450

$125

,302

$128

,453

Be

nch

ma

rk /

Le

ve

l

2014 C

om

pe

titi

ve

Sa

lary

Ge

ne

ral

Ind

ust

ryE

ne

rgy


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Deta

ile

d f

ind

ing

s

Ma

rke

t d

ata

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

24

Ban

d 4

25

P5

0P

75

P2

5P

50

P7

5P

All

fu

ncti

on

sS

pe

cia

list

(P

4)

$88,

957

$97,

755

$110

,463

------

---

Ap

pli

ca

tio

n D

ev

Sp

ecia

list

(P

4)

$86,

220

$94,

725

$105

,575

$108

,189

$113

,534

$120

,817

Fin

an

cia

l R

ep

ort

ing

Sp

ecia

list

(P

4)

$89,

739

$104

,891

$117

,013

$107

,297

$112

,997

$119

,165

Ra

tes

Sp

ecia

list

(P

4)

$88,

859

$102

,741

$110

,463

$99,

130

$106

,184

$112

,129

Ele

ctr

ica

l E

qu

ip E

ng

Sp

ecia

list

(P

4)

$107

,335

$117

,893

$130

,210

$115

,889

$127

,020

$133

,598

Eq

uip

me

nt

Ma

inte

na

nce

Sp

ecia

list

(P

4)

$106

,748

$116

,719

$126

,886

$111

,596

$123

,339

$127

,024

All

fu

ncti

on

sM

an

ag

er

(M2)

$88,

371

$99,

417

$113

,103

------

---

Ap

pli

ca

tio

n D

ev

Ma

na

ge

r (M

2)

$96,

093

$103

,523

$123

,758

$132

,538

$142

,820

$162

,724

Fin

an

cia

l R

ep

ort

ing

Ma

na

ge

r (M

2)

$91,

792

$107

,531

$140

,278

$140

,870

$151

,624

$167

,396

Eq

uip

me

nt

Ma

inte

na

nce

Ma

na

ge

r (M

2)

$96,

289

$107

,824

$133

,729

$134

,552

$146

,756

$158

,153

Ra

tes

Ma

na

ge

r (M

2)

$100

,785

$127

,473

$135

,782

---$1

29,9

23---

Ele

ctr

ica

l E

qu

ip E

ng

Ma

na

ge

r (M

2)

$107

,042

$153

,182

$175

,959

$152

,999

$160

,798

$182

,742

Be

nch

ma

rk /

Le

ve

l

2014 C

om

pe

titi

ve

Sa

lary

Ge

ne

ral

Ind

ust

ryE

ne

rgy


Prop

rieta

ry a

nd C

onfid

entia

l. Fo

r Tow

ers

Wat

son

and

Tow

ers

Wat

son

clie

nt u

se o

nly.

Deta

ile

d f

ind

ing

s

Ma

rke

t d

ata

tow

ersw

atso

n.co

m©

201

4 To

wer

s W

atso

n. A

ll rig

hts

rese

rved

.

25

Ban

d 5

25

P5

0P

75

P2

5P

50

P7

5P

Ap

pli

ca

tio

n D

ev

Sp

ecia

list

(P

4)

/ M

ast

er

(P5)

$94,

969

$105

,966

$122

,096

$118

,296

$127

,737

$141

,022

All

fu

ncti

on

sS

pe

cia

list

(P

4)

/ M

ast

er

(P5)

$100

,737

$113

,054

$129

,574

------

---

Ra

tes

Sp

ecia

list

(P

4)

/ M

ast

er

(P5)

$88,

859

$102

,741

$110

,463

$99,

130

$106

,184

$112

,129

Fin

an

cia

l R

ep

ort

ing

Sp

ecia

list

(P

4)

/ M

ast

er

(P5)

$100

,492

$118

,675

$135

,293

$119

,993

$128

,373

$139

,246

Eq

uip

me

nt

Ma

inte

na

nce

Sp

ecia

list

(P

4)

/ M

ast

er

(P5)

$118

,577

$129

,525

$139

,105

$120

,561

$136

,101

$139

,370

Ele

ctr

ica

l E

qu

ip E

ng

Sp

ecia

list

(P

4)

/ M

ast

er

(P5)

$120

,239

$132

,067

$146

,828

$126

,628

$141

,714

$150

,060

Ap

pli

ca

tio

n D

ev

Ma

na

ge

r (M

2)

/ S

en

ior

Ma

na

ge

r (M

3)

$105

,575

$115

,400

$130

,014

$138

,830

$150

,816

$165

,261

All

fu

ncti

on

sM

an

ag

er

(M2)

/ S

en

ior

Ma

na

ge

r (M

3)

$102

,252

$113

,591

$129

,965

------

---

Ra

tes

Ma

na

ge

r (M

2)

/ S

en

ior

Ma

na

ge

r (M

3)

$100

,785

$127

,473

$135

,782

---$1

29,9

23---

Fin

an

cia

l R

ep

ort

ing

Ma

na

ge

r (M

2)

/ S

en

ior

Ma

na

ge

r (M

3)

$101

,714

$116

,719

$147

,121

$146

,195

$163

,400

$188

,784

Eq

uip

me

nt

Ma

inte

na

nce

Ma

na

ge

r (M

2)

/ S

en

ior

Ma

na

ge

r (M

3)

$107

,677

$125

,517

$153

,426

$134

,552

$146

,756

$158

,153

Ele

ctr

ica

l E

qu

ip E

ng

Ma

na

ge

r (M

2)

/ S

en

ior

Ma

na

ge

r (M

3)

$121

,607

$151

,227

$184

,219

$152

,999

$160

,798

$182

,742

Be

nch

ma

rk /

Le

ve

l

2014 C

om

pe

titi

ve

Sa

lary

Ge

ne

ral

Ind

ust

ryE

ne

rgy


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