AGM 2021

May 6, 2021

Good afternoon, everyone, and welcome to the 2021 Annual Meeting of Shareholders. I'm Jack Sullivan, Vice President of Investor Relations for Duke Energy. Thank you for joining us by webcast or the toll free number we provided in advance. I'm pleased to welcome our shareholders from around the world. Today's meeting is being recorded and will be available through our website. Let's begin by reviewing today's agenda. In a moment, I'll introduce Lynn Good, our Chair, President and CEO, to call the meeting to order and facilitate the business portion of the agenda. Lynn will also provide an update on the company followed by a question and answer session. You may submit questions by selecting the Q and A button on the portal. Today's discussion may include forward looking information and the use of non GAAP financial measures. You should refer to the information contained in our 2020 Form 10 ks and subsequent filings concerning factors that could cause future results to be different from this forward looking information. A reconciliation of non GAAP financial measures can be found on the Investor Relations section of our website. Now as we go through today's meeting, you'll notice that we're all in separate rooms, an approach that aligns with our strict COVID safety protocols. So thanks for your patience as we transition through various segments of today's discussion. Now it is my pleasure to introduce Lynn Good. Has been duly given. A quorum is present, and the meeting is now lawfully convened for the transaction of business. You should see a vote button on your computer screen. The polls are now open, and you can cast your ballot at any time. So again, let me welcome you to the meeting. With that, the meeting will please come to order. Like all of you, our directors are participating online along with our independent auditors, Deloitte and Touche. In addition, Broadridge excuse me, I'm going to pause for a moment. You should see a vote button on your computer screen. The polls are now open and you can cast your ballot at any time. So again, let me welcome you to the meeting. With that, the meeting will please come to order. Like all of you, our directors are online along with our independent auditors, Deloitte and Touche. In addition, Broadridge Financial Solutions has been appointed to act as Inspector of Elections. Jan Castillo from Broadridge is participating and has taken the oath of Inspector of Elections. Cojo Garditego is our Executive Vice President, Chief Legal Officer and Corporate Secretary. Today, he also acts as secretary of this meeting. Kojo will report the number of shares entitled to vote And the number of shares and votes represented in person or by proxy at this meeting. So Kojo, let me turn it to you. Thank you, Lynn. As of the close of business on March 8, 2021, Duke Energy Corporation had outstanding and entitled to vote 769,000,000,216,518 shares of common stock, each of which is entitled to one vote. They're here represented by proxy 649,000,000 248,606 shares of the corporation's common stock, which constitute 84.4% of the total shares entitled to vote at this meeting. The final reports of the Inspector of Election will include the votes, if any, of the shareholders voting through the web portal. Kojo, thank you. Let's proceed with the matters to be voted on. The first management proposal is the election of the Board of Directors. We have a declassified Board, which means that all of the directors stand for election every year at the Annual Meeting. Our elections also require nominees to receive a majority vote rather than a plurality to be elected. These nominees, whose bios begin on Page 11 of the proxy statement, are presented for the purpose of voting for their election as directors. Michael Browning, Principal of Browning Consolidated and our Independent Lead Director Annette Clayton, President and CEO, North America Operations of Schneider Electric Ted Craver, Retired Chairman, President and CEO of Edison International Rob Davis, President of Merck Carolyn Dorsa, Retired Executive Vice President and CFO of Public Service Enterprise Group Roy Dunbar, Retired Chairman and CEO of Network Solutions Nick Fandakis, Retired Executive Vice President, DuPont John Herron, retired President, CEO and Chief Nuclear Officer of Entergy Nuclear Marie McKee, retired Senior Vice President of Corning Mike Facilio, Retired Executive Vice President and Chief Operating Officer, Exelon Generation, Exelon Tom Skanes, retired Chairman, President and CEO of Piedmont Natural Gas and Bill Webster, retired Executive Vice President for the Institute of Nuclear Power Operations. They have been nominated for election as directors for 1 year terms expiring in 2022. I'd like to pause for a moment and recognize Dan D'Amico, Bill Kennard and Maria Rose, who are stepping off the Board at the end of today's meeting. I'd like to thank each of them for their service to our company and wish them the very best. There are 3 additional management proposals being presented for approval. Proposal 2 is the ratification of Deloitte and Touche as Duke Energy's independent registered public accounting firm for 2021 as stated on Page 34 of the proxy statement. Proposal 3 is a vote on an advisory basis of our named executive officer compensation as disclosed on Page 36 of the proxy statement. Proposal 4 It's a vote on the amendment to the corporation's certificate of incorporation to eliminate the super majority voting provision as disclosed on Page 71 of the proxy statement. Also to be presented are 2 proposals we received from shareholders, which Kojo will now introduce. I would like to remind shareholders that each of the proponents' statements are their own and do not represent the views of Duke Energy. The first shareholder proposal identified as Proposal 5 in the proxy statement beginning on Page 72 relates to a request for an independent Board Chair. Presenting on behalf of the proponent, the City of New York Office of the Comptroller, as Amna Khan. Madam Chair, Board members and fellow shareowners, I'm presenting Proposal 5 on behalf of the New York City Comptroller and Pension Funds, which are long term Duke Energy Share owners with about 1,000,000 shares Valued at roughly $150,000,000 Proposal 5 requests a Board policy requiring an independent Board Chair. Duke's laudable commitment to net 0 emissions by 2,050 underscores the need for independent board leadership. Our fundamental concerns are that the Duke is not on track to hit its decarbonization target and that its CEO Has no incentive to make investments and strategic choices whose payoff, no matter how substantial, is decades into the future. Our proposal is not a referendum on Lin's Good's leadership as CEO, but rather on a Board structure that allows the CEO to lead the Board to which he is accountable. Chairing the Board and running the company are distinct time intensive responsibilities for our company to grow and succeed. Shareholder expects both roles to be performed thoroughly and well. The next decade is critical if Duke is to achieve its decarbonization goal, While the onus is on company's management to produce credible plans, it is the Board's responsibility to hold management accountable on behalf of the long term interest of the company and its shareowners. An independent share would be better positioned to lead the Board to fulfill this responsibility. In opposing proposal 5, The Board cites its strongly independent lead director. We have concerns regarding the objective leadership that Director, Michael Browning brings into the boardroom Given his excessive tenure, we share the concerns expressed by the Council of Institutional Investors that extended period of service may adversely impact a director's The ability to bring an objective perspective to the Board room, we question the Board's judgment in renominating Mr. Browning Given that he exceeds both the tenure and age limits established in the Board's own retirement policy, A truly independent chair can provide balance of power between the CEO and the Board and therefore would be better positioned to address Duke's decarbonization misalignment, significantly directed on board with a joint CEO and Chair, report being more likely to have difficulty voicing a dissenting view according to a survey last year by PwC. Therefore, we urge shareowners to vote for proposal 5 The next shareholder Beginning on Page 75 of the proxy statement relates to providing a semiannual on Duke Energy's political contributions and expenditures. Presenting on behalf of the proponent, the State of New York Office of the State Comptroller is John White, Corporate Governance Officer. Mr. White elected to record his statement in advance of the meeting. Thank you. My name is John White. I am representing the New York State Common Retirement Fund And I am presenting proposal 6, political expenditures disclosure. Companies can face legal reputational and financial risks When making political contributions, comprehensive disclosure of corporate political spending is a well established best practice in the best interests of shareholders and aligned with long term shareholder value. Currently, Duke Energy fails to comprehensively closed its corporate political spending and shareholders are unable to fully assess the risks and benefits associated with the company's political activities. Following the violence at the Capitol on January 6, Duke announced a pause in the company's contributions in order to evaluate its political spending. Today, shareholders are asking the company what was the outcome of this evaluation? Is the company considering making changes that would better align spending and disclosure policies at Duke with best practices? While Duke has improved its corporate political spending disclosure over the years, the company still fails to disclose payments to all trade associations And payments to organizations referred to as social welfare organizations that may be politically active, nor is their disclosure of trade use of the company's money on issues related to electioneering expenditures. These gaps in disclosure leave shareholders in the dark about risks to the company that can arise when trade associations, Supported by the company's money, make political contributions that may be contrary to the company's values and goals. In its opposition statement to Proposal 6, Duke says shareholders do not need this information because it won't provide additional understanding of Duke's political activities or strategies. Proponents and other shareholders find the company's opposition unconvincing. It's not for the company to decide what information shareholders will find meaningful. Shareholders clearly want this information. Duke already gathers this information, including all indirect lobbying through its trade associations and social welfare organizations for compliance requirements, and the company could readily provide this report to shareholders at minimal expense. Shareholders are encouraged to vote today for proposal 6 on the proxy, the shareholder proposal regarding a semiannual report on Duke Energy's political contributions and expenditures. Thank you. That concludes our presentation of the proposals before us at the Annual Meeting. If you've not already voted your shares or if you'd like to change your vote, You may do so by clicking on the voting button on the web portal and following the instructions there. The polls will remain open for the next several minutes until the Q and A session begins. Kojo, thank you. And before I answer questions from our shareholders, I wanted to provide a brief business update as 2020 was an incredible year for our company. A year ago at this meeting, we were 2 months Into the COVID-nineteen pandemic and you could see the impact to our business, our customers and communities. And like all of you, it has profoundly changed us. For us, it required our company to change how we operate and interact with our customers, stakeholders and one another, while continuing to safely provide an essential service. We faced these challenges head on and responded swiftly. Our priorities were very clear: take care of our customers and protect the health and safety of our employees. We were one of the first utilities to proactively waive certain fees and suspend disconnections for customers who are unable to pay their bills. We also transitioned approximately 18,000 employees to remote work and put protocols in place to keep our frontline employees safe. Our workforce showed incredible resolve as they adjusted to new working conditions, maintaining our industry leading safety results. They also met the challenges of operating during a pandemic, completing more than 150 refueling and maintenance outages and ensured we could respond during an active hurricane season. As the pandemic disrupted financial markets, we took immediate action to ensure our Financial Stability, entering into low cost loans and developing an aggressive $450,000,000 mitigation plan, showcasing once again our agility. This response allowed us to deliver financial results within our updated guidance range for 2020 and continue paying our dividend, Which we have now done for 95 consecutive years. Again, I want to thank our teammates for all of their incredible work. And that work continued throughout the year as we did more than overcome challenges in 2020. Despite the pandemic, we made progress toward our carbon reduction targets As we look to deliver at least 50% reduction by 2,030 in electric generation with the ultimate goal of net 0 carbon emissions by 2,050. We achieved a major milestone in 2020, surpassing 40% carbon reduction from 2,005 levels and introduced a net 0 methane target for 2,030. We expanded our renewables footprint in our regulated and commercial businesses, announcing more than 700 megawatts of Solar and Wind Energy Projects. We continue to invest and modernize our grid to increase reliability and support clean energy technologies. Around electric vehicles, we built momentum as we invested in charging infrastructure and announced our own pledge to electrify 100% of our light duty vehicles and 50% of our medium, heavy duty and off road vehicles to electric or 0 carbon alternatives. And through our Carolinas Integrated Resource Plans, we showed our commitment to stakeholder engagement as we bring to life the clean energy future we know our customers want and deserve. But ultimately, what matters is the response of our customers. In 2020, I'm proud to share that we surpassed our internal Customer satisfaction target by nearly 15%. And it's exciting to see that we've carried this momentum into 'twenty one as we've taken several significant steps to eliminate uncertainty and strengthen our company. We reached a milestone settlement with the North Carolina Attorney General's Office, the public staff and Sierra Club on coal ash recovery, resolving the last remaining major issues on coal ash in North Carolina and providing clarity for customers and investors. And last month, the North Carolina Utilities Commission approved our settlement as part of our 2 rate cases. In Florida, the Public Service Commission approved our settlement with consumer and business groups on a new multiyear rate plan to recover investments in our grid, Solar Generation and Electric Vehicle Infrastructure. We also received approval of the 1st 3 years of our storm protection plans in Florida, Representing a $6,000,000,000 investment to harden our grid over the next 10 years and our Clean Energy Connection program, Which will provide Florida customers with 7 50 megawatts of new solar by 20 24. Duke Energy Florida is advancing our clean energy vision, working collaboratively with stakeholders throughout the state. In January, we announced a minority investment in Duke Energy Indiana from GIC, and experienced investor in U. S. Infrastructure that will help fund our clean energy investments and grid enhancement plans, replacing the need for equity over the next 5 years. Indiana will also file an integrated resource plan later this year, providing an opportunity to continue the conversation and the progress toward our clean energy vision in the state. And we began to roll out Customer Connect, our new customer information system, as we bring new enhanced services to our customers. Together, these developments give us even more confidence over our financial outlook, leading To increase our long term EPS growth rate to 5% to 7% through 2025 and affirm our 5 year $59,000,000,000 capital plan. Looking ahead, it's clear that our industry continues to evolve and the pace of change will only increase. But we're not just keeping pace, we're at the forefront Transforming and reshaping our company. I'm excited about the future, and you see this optimism in the performance of our stock this year. We're poised for success and growth unencumbered by issues in the past with a compelling Clean Energy vision to guide the way. And we'll build on our productive relationships with policymakers and regulators to find constructive solutions that provide clarity and value for our customers and investors. We had a very strong 2020, delivering results for our investors, customers and communities, and we appreciate your investment in Duke Energy. Now that the polls are closed, I will ask Kojo for the Inspector of Elections report before I answer your questions. Based on the proxies received, each nominee for Director has been elected by over 88% of the shares voted. The ratification of Deloitte and Touche as Duke Energy's independent registered public accounting firm for 2021 has been approved with approximately 96% of the vote. The advisory vote on our named executive officer compensation has been approved with approximately 93% of the vote. The vote on the amendment of the corporation's certificate of incorporation has failed, receiving the support of 63% of the corporation's outstanding shares. Shareholder Proposal 5, Seeking an independent Board Chair has failed, receiving approximately 35% of the vote. Finally, Shareholder Proposal 6, requesting a semiannual report on Duke Energy's political contributions and expenditures, has passed, receiving approximately 52% of the vote. Kojo, thank you. The final reports of the Inspector of Election are ordered to be filed with the minutes of this meeting. The meeting is adjourned, and now I'd like to answer some of your questions. So Jack, I'll turn it over to you. Thanks, Lynn. For the past several weeks, we've invited our shareholders to submit questions and welcome you to submit others while we are on the air. We appreciate and value the level of engagement and interest from all of you. We know it's important your voice is heard, so I'm going to read the questions exactly as you submitted them. All of the questions we received and answers to them We'll be posted on the Investors section of our website soon. And Lynn, we've received a lot of questions in advance, so we've got a lot to talk about. What jumps out to me is how many of them focus on environmental, social and governance topics or ESG for short. Jack, it is interesting because that focus on ESG is not only important for Duke Energy, but I recognize how important it is to investors. We just filed our sustainability report in the last couple of weeks and really used that as a way to continue to communicate and be transparent about our progress. And I'm also proud of the ESG Day that we hosted in October, giving us a chance to put a voice to a and look forward to continuing that conversation with our shareholders. Thanks, Lynn. We've heard you speak that Our clean energy strategy is our business strategy. So it seems fitting we kick off the Q and A on that topic with this shareholder question. How quickly are you moving to a non carbon based production capability? How can you move in that direction more quickly? Jack, thank you. An aggressive movement toward carbon reduction is a key priority at Duke Energy, and we come to this building on a really strong foundation. Our carbon emissions are down 40% from 2,005, which has been the result of adding Natural gas, renewables, retiring coal over a decade. And as we look ahead, we see a target and have set a target to be at least 50% carbon reduction by 2,030 and net 0 by 2,050. So what does that mean? Well, it means that we're going to keep going Aggressively, over the next decade, we have a clear line of sight. It will include retirement of coal. It will include more renewables. And based on some of our early planning, Our renewable capacity will double by 2025 to 16,000 megawatts and triple by 2,030 to 24,000 megawatts. Our nuclear plants also remain very important during that time frame. Battery storage will be introduced more specifically At a greater quantity and of course, we'll continue to see a need for some level of natural gas for reliability. As we get beyond 2,030, We reach a point where we see the need for new technologies, and this goes hand in hand with the question on how we can move more rapidly. We can do more rapidly when those technologies become commercially available so that we can ensure we're making the reliability and the affordability match Our carbon emissions. So I'm talking about things like hydrogen, carbon capture, longer duration storage, advanced nuclear. These are technologies that we believe will be necessary to go even deeper on carbon reduction and ultimately be important to get to net 0. So Jack, this represents an incredible opportunity for our customers as we make this progress, but also for our investors. It really underpins The 5% to 7% growth rate that we have established and we're moving as quickly as we possibly can and advocating for those research and development technologies, Research and Development on the technologies that we're going to need to get to our net zero goal. Lynn, we know that nuclear energy plays an important role in our path forward to net 0 emissions. So let's dig in a little deeper on that topic with the shareholder question. What is the company's current and future Strategy Relative to Nuclear Energy. Has or will there be any discussions with the Biden administration relative to nuclear energy and construction of new plants? If so, what was the outcome of those discussions? Nuclear energy is really foundational to our aspirations to move deeper on carbon reduction. And one of the things, Jack, that I would share is that here in the Carolinas, our nuclear fleet represents about 50% Of the power that we produce. It runs 95% of the time and it's carbon free. And so as we talk about our goals and aspirations around Low Carbon Future Nuclear is always part of the conversation for Duke Energy, not only at the federal level, but at the state level as well. We're actively pursuing second license renewal, which gives us the ability to continue operating the plants that we own for as long as we can. And of course, safety is job 1. And then we're also involved in research and development, lending our voice as an operator to technologies like TerraPower, GE Hitachi that are looking at advanced reactors with storage capability and those represent Potential technology that we could use in the 2030s as we continue to pursue net zero. I believe President Biden appreciates The role that nuclear plays. And we will continue to advocate on behalf of our nuclear plants. We think it's essential to achieving our carbon reduction targets. Okay. So let's shift gears now over to electric vehicles. Lynne, I don't know about you, but I'm seeing a whole lot more EVs out on the road these days and it seems like there's a growing interest in the role we play in building out needed EV infrastructure. So let's move to a question on that topic, which is what is Duke Energy's plan of action to make charging stations resilient and available throughout the U. S. With its multi company agreement between 4 other companies. Jack, we see electrification as an incredible opportunity for our company, not only to electrify The use of vehicles and transportation for our customers, but to achieve carbon reduction and also to use our assets more effectively, Another way for us to bring electricity into our communities. And we have a number of initiatives underway. We are piloting infrastructure In almost every jurisdiction to provide a backbone of infrastructure encouraging adoption of electric vehicles. We've also made a pledge to electrify our own fleet So that we continue to build on our subject matter expertise going with our light duty trucks first and then medium and heavy duty. And we're also looking at our grid. So this distribution network that we operate that is so critical to reliability, what are the investments we need to make to accommodate Not only intermittent renewable resources, but also to accommodate electric vehicles. All of these things are in the works. We also have put in place An entity called Etrans that is working with municipalities and commercial customers in order to help them electrify. We have a partnership with the City of Charlotte to help electrify municipal buses. And then the highway coalition that you referenced in the question is just a group of utilities coming together To see how we can help enable a corridor of electric vehicle charging so that one of our customers in Ohio can travel to North Carolina with confidence And in electric vehicle and we see this as a way we can continue to contribute. So I think this is going to become a bigger and bigger story. As I look at all of the stories around the Our manufacturers moving in this direction, we are moving as quickly to be prepared so our customers can count on And Infrastructure to Charge Their Vehicles. Yes. EV really is a game changer, and it underscores the importance of reliability. For the past century, our customers have been counting on us to power their homes and their businesses. And going forward, they'll be looking to us to power their vehicles. Speaking of reliability, This next investor question wants us to touch more on that by asking what is Duke Power doing to avoid any situation such as what occurred in Texas this winter. Texas has been an opportunity as an industry and Certainly, Ado, for us to reflect on what can we learn. It has certainly raised the conversation of the importance of resiliency and reliability. And I think that's really important, Jack, that that is a part of the conversation as we think about the massive change out and transformation of the bulk power So we do operate wind and solar assets in Texas and we were impacted Some of the assets running at lower capacity factors, some of them did not run for a period of time. But I'm very proud of the team That works on those assets to get them back in service as quickly as they possibly could. And we've also taken a step back to really learn and Look at our practices. We have learned a lot over a long period of time on weatherization. We may think back to the polar vortex as a great example Where we've been investing around hardening and resiliency of our grid. Every season over the last several years, we've had an opportunity to look at our system through the lens of Hurricane and storm risk. So we've been working on techniques to protect our infrastructure from flooding in particular. And then we continue to Appreciate and invest in diverse fuel sources because I think that diversity of mix, the ability to have dual fuel capabilities gives us more resilience in the generation of power. So we will continue to take opportunities like Texas or any weather event to really take stock of whether we're doing everything we should do Because our customers are counting on us 24 hours a day every season and that's our commitment to Duke Energy. Okay. So sticking with that theme of reliability, here's a shareholder question. Do we have any plans to place our power lines underground in Florida? As a hurricane prone state, it would seem to be a prudent step. Undergrounding can be a very important way to improve reliability, Jack, in certain circumstances. And I'm pleased about the program in Florida called the Storm Protection Plan, which is specifically focused on hardening and resiliency and undergrounding is part of it. So what we have done is we've taken a lot of statistics around our system and really identified those spots where we believe undergrounding would have the greatest benefit to our customers. And over the period of this program, we'll be undergrounding about 1,000 miles of distribution network and continue to look for ways Even outside of undergrounding that we can improve reliability and resiliency. So yes, more to come in Florida and also Okay. So in our opening remarks, we acknowledge the importance of ESG and we've touched on the environmental aspect of that a good bit so far. Let's shift to social and governance topics, starting with the shareholder question on social responsibility. Has the Board adopted or made any policy to acknowledge Black Lives Matter or any other social or racial groups? Jack, as I listen to that question, I hear an emphasis on diversity and inclusion. And I would confirm to this shareholder and all shareholders that diversity and And inclusion is a very high priority at Duke Energy from the Board level to the executive level to throughout our company. And we really took stock in 20 on whether our goals and aspirations around diversity and inclusion are really achieving what we want them to. We hosted over 500 conversations among our employees to really put on the table, how do they feel, how are they working together, is there a way we can Continue to improve and create an inclusive culture. We've also reenergized training. We've put a diversity and inclusion council together across the enterprise to help us look at not only the programs we have in place, but frankly, whether we're making progress. And we've moved out into our communities through our employee resource groups and also through our foundation To really support those programs that we believe are consistent with this idea of promoting diversity and inclusion in our communities. So I'm proud of the work that is underway. There's always more work to do on this, and our commitment is we will keep going Because we regard diversity and inclusion as a critical element to our business success, and we want our organization to reflect the communities that we serve. Lynn, one of our shareholders has voiced an opinion on your support of the business roundtable statement. So I'm going to read those opinions and give you an opportunity to respond. Please remove your signature from the Irresponsible Business Roundtable Statement of Corporate Purpose. It was wrong. Reread Milton Freeman to understand why. Jack, I appreciate that question. And I think what I'd like to do is describe for the shareholder why I did sign, What was in my mind when I contributed in that way. And I would talk about it in this way. At Duke Energy, we must serve our customers well and with excellence. As an infrastructure builder, we must To be involved in our communities and with stakeholders, you can't build infrastructure without a stakeholder engagement plan that makes it possible to bring people along on what is necessary in order to expand our system. And then our employees, in this period of transformation where talent is so incredibly important, In order for us to achieve our goals, we have to be able to attract and retain talent. And if I do those things well, Serve my customers well, engage my communities and stakeholders well so we can build the infrastructure on time, on budget and deliver returns. And if we have the talent to pursue the strategy, then investors are going to win. And I understand that we must Be cognizant of our shareholders. We must deliver a return. We are committed to doing that every day. But I believe there are elements of all of these things That have to come together in order for our investors to do well. One example I would share is the response to COVID. So COVID lands in March of 2020. I focused on 2 things right out of the gate. 1, I have to keep serving my customers. That essential service of electricity was never more important than in 2020. And 2, I need to keep my employees safe So they can operate the assets, so they can operate the distribution control centers. And when I focused in that way, investors also won. And we were able to navigate through that period of uncertainty in a way that delivered returns to our investors but also took care of our customers' employees. So I'm a believer that there are many elements to our success at Duke Energy, But in no way am I stepping away from that important responsibility to investors. I just believe that customers, stakeholders and employees have an important role to play so we can be successful. Great. This next shareholder question relates to political involvement by asking, Where does the Board stand on immersing, commenting, acting on what could become political issues? Does the Board see the need to involve the company in issues other than its own operations? This is an area, Jack, where I would say we are finding our way. Historically, our voice has only been in a conversation around energy, And that has been an important voice advocating on behalf of our customers, advocating on behalf of our investors. But as you know, there are calls around corporations on matters affecting employees and matters affecting the community. And we're working very hard to be thoughtful. We look at each one of these and really evaluate can our voice be make a meaningful impact. And my hope is that we will continue to be thoughtful as we do that. We will not comment on everything, but there may be an opportunity where we believe it's important to underscore Where the company stands and what it means to our company, our employees and our communities. So I think we're finding our way as I know many are and hope And we'll continue doing so in a really thoughtful way. Lynn, this next shareholder question relates to our disclosure of Political Contributions by asking why would the Board of Directors be against letting the shareholders know what political contributions are made each year. Jack, I think the first point I would make here is we are not against Disclosure of political contributions. We have continued to advance our disclosures, taking feedback from our investors. And just this year, we expanded disclosure on the contributions and actually of our trade organizations on the important topic of climate. I would also emphasize here that governance continues To be important that political giving within our company has the right degree of oversight, an incredible degree of oversight, not only from executives but also from the Board. But I also recognize that this is a growing topic. You can see that in Shareholder Proposal 6, and we will continue to evaluate our policies going forward. And I would also emphasize that it's important that Duke Energy be involved in the political process. There is no place today, State, federal, local, where energy is not a part of the conversation and we must be a part of the conversation so that we can bring our subject matter expertise, our experience, The needs of our customers to the table, and we'll continue to do that. In the interim, I would always encourage investors if there are questions, our Our Investor Relations team is available. And as I said before, we'll continue to evaluate these disclosures. Lynn, there were several questions about Board diversity, such as this one. Why are you not more diversified? In 2021, the excuse to not be diversified is not acceptable. The Board should reflect the culture of all that they provide power to. Jack, I am very proud of the level of diversity on our board. By traditional measures of gender and race and See, we're at 38%. Diversity is always a consideration as we continue Board refreshment and it will be into the future. But I think another important element of diversity on any Board is the skills, financial skills, legal skills, regulatory skills, risk management Skills. And we also look at diversity there as well. I look at the program that we've had in place over the last many years at Duke. We've added 9 New directors in the last 5 years, not only with an eye on traditional measures of diversity, but also on diversity of skills. And that will be our commitment going forward. As I said earlier in the question and answer, diversity and inclusion is important priority at Duke, Not only at the Board level but throughout the company as well. This next question seeks clarity on our Board side by asking why is it necessary to have so many directors? Is it totally to spread the wealth of other directors? Board size in many respects, Jack has to do with the Board's work. And I think about our Board, we have not only the traditional committees that you would of public company audit and finance, comp and governance. But we have a substantial operations committee. We are the largest operator of nuclear Power, regulated nuclear power in the U. S. And so we have specific expertise on our Board around operations. They're really important To shareholders and to our success in our communities. And so when I look at the complexity of what we operate across those 5 committees and the depth of the business, the Scale of the company. I think the number of directors we have is just about right. We'll continue, of course, to challenge that as we go forward and look at that. But I believe it's a very robust board with great skills and capability with the diversity elements needed To really provide the governance that is important for a company of our complexity. So shifting to executive compensation, this shareholder asks, what is the justification for paying an executive officer 116x the median employee wage. I would back up just for a moment on compensation and talk a little bit about what the goal of the compensation programs are at Duke. And the goal is to attract and retain the talent necessary to move our company forward. And that means looking at benchmarks not only in our industry, but in the markets in which we serve. And that also means that as we look at compensation, we're looking to ensure that the compensation relates to, ties to, is influenced by the performance of the company. And that's particularly important at the executive level. If the shareholders if the share price performs and the stock performs, Management is compensated. If the share price does not perform, management is affected in that way as well. I think in this period of transformation, I made this Attracting and retaining talent is incredibly important for the success of this transformation that's underway, for us to embrace the digital Transformation that's underway for us to embrace the change out in our resources, the introduction of renewables, really embracing all of the elements Of transformation that are occurring throughout business. And having compensation packages that give us the ability to do that, I think, is very important for the role that we play And our communities with our customers and with our investors. Lynn, we've made a lot of headway as a company resolving coal ash related issues. But this next shareholder question seeks a bit more color on that by asking What plan of action does Duke Energy plan to take with coal ash waste from all the closing plants? Our remediation is well underway, Jack. We are 5 plus years into it, moving rapidly and safely. We've Close a number of basins and really are running an industry leading program, always protecting people and environment. It's job 1 for us. And we're closing by excavating some of the ash into lined landfills. We're beneficiating some of the ash, which is a fancy word for recycling it into construction projects. And in some circumstances, we're also closing the ash in place. And all of this will continue to play out over the next decade or so As we continue our work and our commitment is to continue to focus on this in the way that protects the environment and also manages this Very well. And I believe we've done that to date and that's our commitment to keep going. Okay. This next shareholder seeks a bit more clarity on our announcement last year canceling construction of the Atlantic Coast Pipeline. The question is, What impact will the decision to end the Atlantic Coast Pipeline project have on shareholders and Duke customers in terms of lower earnings per share and higher electric and natural gas rates. Also, what are the economic impacts of lost jobs and Economic Development on the regions served by the company and perhaps other affected regions. There's a lot in that question, Jack. And what I would say was a difficult decision to cancel the Atlantic Coast Pipeline because the business case Of strengthening infrastructure was strong and continues to be strong. But frankly, the legal uncertainties and the impact on cost and schedule really made it the right business decision. And so in our 2020 results, you'll see an impairment charge resulting from the write off of the investment that we made in Atlantic Coast Pipeline and you'll also The work around the capital structure of the company as we paid off the construction loan, etcetera. So that is behind us, And we're positioned to go forward with a 5% to 7% growth rate and a really clear strategy and vision around this clean energy transformation. But I would also say that there's still a need for infrastructure in the eastern part of North Carolina, not only for our local distribution business, but to continue to support The supply of natural gas into the state. And so we are looking at other options. We're considering how we might do that, how we might invest In a way that continues to meet the needs of the business and needs of the customers. And I would also say we continue to maintain A very strong focus on economic development, not only in the Carolinas, but in every state we serve. Energy is often a differentiator on why a Company or a manufacturer comes to a state. And so we have resources specifically developed devoted to economic development, and that commitment will continue. And we have our eye on how we can continue to support the eastern part of North Carolina in that regard. And so more to come as we work our way through this Always working to find a way to put the infrastructure in place to serve customers and also supporting our states on economic development. This next shareholder question relates to Duke Energy's obligation to pay income taxes by asking, I read in the newspaper that Duke Energy did not pay any income taxes last year. Is this true? Jack, I appreciate that question because this is one that I'd love to clear up because I think there are some misconceptions here. And I'm going to start With the fact that the company pays around $2,000,000,000 or so of state and local taxes every year. And in many of our counties and States in which we operate, we're the largest property taxpayer because of the nature of our network and assets. And that He's been an important part of the way the company has contributed to our states for a long time. On the federal level, we are an infrastructure builder. And there are incentives in the federal tax code to allow infrastructure builders to depreciate those assets more rapidly. Sometimes there are Tax credits and all of that not only gives us an ability to build that infrastructure, but it benefits our customers because that infrastructure is serving our customers. So what those incentives basically do is move the payment of income taxes into the future. So on the balance sheet of Duke, We have about a $10,000,000,000 deferred tax liability, meaning we owe those taxes in the future and we will pay those taxes in the future. And so I just think it's the question requires us to go a bit deeper on how it all works. But we, of course, Pay every dollar of tax that we owe in accordance with the laws at the federal and state level. And We do benefit as our customers benefit from certain incentives directed toward infrastructure construction. Lynn, we've heard you talk about the important role that natural gas plays in our clean energy transition. And this next shareholder question seeks to learn a little bit more about the useful lives of our natural gas fired assets by asking, How can shareholders be sure that natural gas plants will not be decommissioned early to meet lofty carbon goals that do not follow the lifecycle of these new plans. That's a question, Jack, that I think really speaks In some ways to the transformation going on in our industry, with all of the change that's going on and new resources and new technologies that we will develop Over the coming years, how do we make sure that those assets have the appropriate useful life? It's asked about natural gas, but it could apply to remaining coal assets. It could apply to early stage renewables. And so we are working actively and will continue to work with our regulators and policymakers as we make investments in infrastructure to make sure there's a clear understanding of how we're going to use those And for Duke, we see natural gas as an important bridge fuel. And our planning right now here sitting in 2021 Seize a life of 20 years or so for that important fuel to accompany and support intermittent resources. It really is dependent on where do other technologies and when do those technologies begin to show up so that we can provide the reliability The natural gas supplies today complementing those renewable resources. So I'd close by saying we're aware of this issue. I think this issue goes with any transformation And we'll continue to work closely with our regulators and policymakers to make sure we can get it right on how we transition assets from one technology to another. Okay, Lynn. It looks like we've got time for about one more question. So let's close out with this one on fleet transition. How do you see the balance between renewable and nonrenewable energy sources? I have a concern that too much Emphasis is being placed on renewables. I think the important part of that question, Jack, is the word balance Because there is no single solution to how you supply reliable power to customers. A diverse set of resources Has been important over many decades and we believe it will be important in the future. And I would point to integrated resource planning in the Carolinas, in Indiana, our 10 year site plan in Florida. In every case, we look at what we believe is going to be necessary over the next 5, 10 15 years, a complementary set of resources to meet the needs of our customers. And as I said a moment ago, as we get out into the 2030s and 2040s, we see a need Technologies that don't exist today at commercial scale, hydrogen, longer duration storage, advanced nuclear, carbon capture, etcetera. And so we're working actively to advocate for the research and development necessary to move forward. So that balance of resources is going to be important For us, as we continue this transformation and our commitment to our customers is reliability will always be a part of the way we evaluate resources and also Thank you. I know this Q and A time with you is important to our investors, so I'm going to turn it back over to you to wrap things up. Well, Jack, thank you. Thank you for the questions. Thanks for the shareholders who have participated today. We Appreciate your interest and investment in Duke Energy. As a reminder, we will post your questions and answers to the Investors section of the Duke Energy website under today's date. And I'd like to thank you again for joining us. And as I said, thank you again for your investment in Duke Energy and have a great afternoon.