FPL parent company rejects demand for a report on impact of sea level rise to nuclear plants
In a swift 17-minute meeting held in a Oklahoma City hotel Thursday, NextEra Energy successfully won shareholder approval of a $31 million compensation package for its five top executives, and defeated two proposals aimed at increasing transparency over how the company is handling sea level rise and political contributions.
"The company you own had a very strong 2015,'' declared NextEra president and CEO Jim Robo as he called the quick meeting to order at the Embassy Suites hotel in downtown Oklahoma city.
He is among the company’s five top executives who, shareholders agreed will be paid $31 million in performance pay and stock because of the company’s strong financial performance in the last year. Robo alone earned at least $15.2 million in compensation in 2015, according to the company proxy statement.
The Juno Beach-based company is the parent of Florida Power & Light and one of the nation's largest utility conglomerates. The audio cast of the annual meeting for company shareholders is available on the company’s web site.
Robo cited NextEra’s better than average reliability, its lower than average customers bills, its satisfaction among business customers, its acquisition of a Texas pipeline, and its expanding wind and solar market as evidence of “the whole company delivering outstanding financial performance for our shareholders.”
Robo did not make note of the troubles ahead, such as the federal and state orders for FPL to clean-up its leaking cooling canals in order to stop a plume of saltwater from migrating into South Florida’s drinking water supplies and leaking into Biscayne Bay or the resistance the company faces in its bid to purchase Hawaii Electric.
Robo recognized a representative for Coral Gables activist and NextEra shareholder, Alan Farago and his wife Lisa Versaci, to present their shareholder proposal to require the company to report each year on the risk its faces from sea-level rise, under a range of scenarios and according to the best available science.
Farago has argued that FPL's position as the supplier of electricity to Florida's east coast is "extraordinarily vulnerable to the financial disruptions of climate change."
Speaking on Farago's behalf at the annual meeting, Patricia Scott said the risk to NextEra could lead to "diminished energy utilization rates, down time and damage to facilities" and other market disruptions that could result in "unlimited financial vulnerability."
NextEra opposed the nonbinding measure, arguing that "a proposal that asks the company to speculate on a single aspect of global climate change nearly a century into the future would be a waste of time and money."
NextEra shareholders -- most of them mutual funds and financial companies -- rejected the proposal, with 65 percent opposed and nearly all of the votes cast before the meeting.
Farago said he was encouraged by the vote, given the fact it was a first-time resolution.
"The issue's not going away and we're not going away,'' he said. "I expect in the future there will be a lot more resolutions related to this disconnect between corporate behavior and investor concerns and sea level rise."
He said that while the reinsurance industry believes climate change is a "very serious threat to global economic stability" corporations like NextEra Energy "are going along the path of least resistance."
The vote was closer for the proposal by Thomas P. DiNapoli, the comptroller of the State of New York who represents the New York State Common Retirement Fund which owns more than 1.2 million shares of NextEra stock.
DiNapoli’s proposal would have required NextEra to disclose all political expenditures the company makes each year, including all campaign contributions made to candidates, campaigns and non-profits. But it was rejected by 55 percent of the NextEra shareholders. The margin is closer than last year, when DiNapoli’s proposal was defeated by 60 percent of the vote.
"An increase of votes in support is encouraging and should speak loudly to the board,’’ said DiNapoli spokesman Matthew Sweeney in an email.
“As long term investors, concerned about the transparency of their portfolio companies, Comptroller DiNapoli and the New York State Common Retirement Fund will consider refiling this request. More and more corporations are voluntarily disclosing their political spending, leaving the ones that ignore shareholders at increased risk of becoming outliers."
Since the Citizens United ruling, DiNapoli has been on a campaign to get the nation’s Fortune 500 companies in which his state’s fund investsto list their spending on candidates, political parties, ballot measures, any direct or indirect state and federal lobbying, payments to any trade associations used for political purposes, and payments made to any organization that writes and endorses model legislation.
The measure attempts to put spending on dark money political campaigns into the spotlight and to reduce the opportunities for companies to publicly take one position but privately campaign against it. Aetna Insurance, for example, publicly claimed support for Obamacare then accidentally disclosed documents that showed it had privately spent $7 million financing efforts by the U.S. Chamber of Commerce and other groups to oppose it.
According to the Washington, D.C.-based Center for Political Accountability “NextEra Energy does not disclose its contributions to candidates, parties, and committees, or its payments to trade associations and other tax-exempt groups, such as 527 or 501(c)(4) organizations.”
The group says that a review of government web sites shows the company has spent at least $5.4 million on influencing politics since 2004 but those numbers are likely very conservative. A Herald/Times analysis of campaign records at the Florida Division of Elections found that FPL alone spent $2.3 million on candidates and campaigns in the last six months of 2015.
Sweeney noted that of the 13 shareholder proposals filed this year, five have agreed to disclosre their direct and indirect political spending, including Coca Cola Enterprise, Raytheon, Union Pacific and Waste Management this year. There are now 32 companies that have adopted or agreed to adopt political spending disclosure procedures, he said.
Company spokesman Rob Gould said the company has held its meeting outside of Florida for the last four years because it’s “Fortune 200 company that has a very substantial presence in many states, including Oklahoma where we’ve made capital investments of approximately $3 billion through 2015.”
But long distance from the company’s largest customer base -- 4.8 million Floridians -- led to a quiet meeting. When Robo asked the audience if anyone had any questions, there was silence. He then adjourned the meeting.
In addition to Robo’s pay, the shareholders approved the following executive compensation for 2015:
- Robo: $24 million in outstanding equity incentive awards;
- Moray Dewhurst, chief financial officer, $4.9 million in performance pay $8.7 million in outstanding equity incentives;
- Manoochehr K. Nazar, president of the nuclear division, $4.5 million in performance pay and $5.6 million in outstanding equity incentives;
- Armando Pimentel, Jr, president of NextEra Energy Resources, $4.3 million in performance pay and $5.2 million in outstanding equity:
- Eric Silagy, president of FPL, $3.2 million in performance pay in 2015 and $2.9 million in outstanding equity incentives.