Former NIPSCO CEO Jimmy Staton's pay at parent company NiSource Inc. dropped to $2.85 million in 2013, but he will pick up $3.4 million during the next year for not competing with the company.
Staton's 2013 pay dropped from the $3.63 million he earned in 2012 due to forfeiting long-term stock awards because of his retirement effective last month, according to NiSource's 2014 proxy statement filed with the Securities and Exchange Commission on Friday.
Staton was appointed head of NiSource's pipeline and transmission business in September 2011, but continued to serve as NIPSCO CEO up until Jim Stanley took that job in October 2012. Staton was first hired by NiSource in 2008 to lead its Columbia gas utilities and he became NIPSCO CEO in 2010.
In exchange for signing a two-year non-compete agreement, Staton will receive payments of $1.7 million on Oct. 15 of this year and another $1.7 million payment on March 1, 2015, according to a NiSource filing with the SEC in December. The proxy filed Friday refers to the non-compete payments but does not give the amounts.
As NIPSCO CEO, Staton was widely credited with salvaging NIPSCO's troubled electric rate case in 2011 and 2012 by revamping rates for industrial customers while reducing the company's request for a residential rate increase. NIPSCO has 457,000 electric and 786,000 natural gas customers in northern Indiana.
NiSource CEO Robert Skagg's Jr. pay increased to $5.18 million in 2013, a 10.6 percent increase from his pay of $4.68 million in 2012, according to the proxy statement.
The increase was due to a hike in his cash performance award, which is tied to company operating earnings and employee safety.
The proxy statement's executive compensation section points out NiSource was an industry leader in stock price appreciation and delivered a total shareholder return of 36 percent. Earnings growth met company guidance for the seventh straight year and the dividend was increased 4 percent.
Skagg's pay remains below the 50th percentile for CEOs of similar companies in the industry, according to NiSource spokesman Mike Banas.
In addition to NIPSCO in Indiana, NiSource owns utilities in six other states as well as a gas transmission and storage business serving 16 states. Its headquarters is in Merrillville. It is one of only five Fortune 500 companies headquartered in Indiana and the only in Northwest Indiana.
The proxy puts forward all 11 current board members for election at the annual meeting to be held at 10 a.m. May 13, at the Crowne Plaza O'Hare in Rosemont, Ill.. Also, an advisory vote of shareholders will be taken on executive compensation.
An outside proposal from New York State's retirement fund would have the company reveal more about its political contributions, including payments to trade associations that might be used for political purposes.
NiSource's board of directors is opposed to the proposal, stating it is unnecessary and not in the best interests of the company. It notes its political action committee, funded by voluntary employee contributions, files reports with the Federal Election Commission and various state and local commissions.