Good morning, and welcome to the PPL Corporation Annual Meeting of Shareowners. I would like to turn the meeting over to Bill Spence, Chairman and Chief Executive Officer of PPL Corporation. Please go ahead.
Good morning. It's my pleasure to welcome you to our Annual Meeting of Shareowners. This year, we have elected to hold our meeting virtually to protect the health and safety of our employees and shareowners as together we confront COVID-nineteen. With me on the phone today is Vince Sorgi, President and Chief Operating Officer Joanne Raphael, Executive Vice President, General Counsel and Corporate Secretary, who will also serve as Secretary of today's meeting and Joe Bergstein, Senior Vice President and Chief Financial Officer. Also on the phone today are the heads of our major operating subsidiaries in Pennsylvania, Kentucky and the United Kingdom.
And now will be annual meeting of PPL Corporation. Please come to order. At today's meeting, we will first conduct the business portion involving 3 management proposals and 1 shareowner proposal as noted in the proxy statement. After the polls close for voting on these proposals, I will address PPL's response to COVID-nineteen. We will then answer questions submitted on the Annual Meeting website.
Shareowners who have logged into the website may ask a question by typing it into the box at the bottom of the screen at any time during the meeting. We will conduct the meeting consistent with the rules of conduct posted on our website and available through the link at the bottom of your screen. It is possible that my remarks today may contain forward looking statements about future operating results or other future events. Actual results may differ materially from these forward looking statements. Please refer to PPL's SEC filings for a discussion of factors that could cause actual results to differ from the forward looking statements.
Now let's move ahead with our meeting. At this time, we will appoint a Judge of Election for today's meeting. Tracy Oates, who represents Broadridge, will serve as our Judge of Election. I have been informed that notice of this meeting was properly mailed to the shareowners of the company and that a quorum is present. The first proposal to be considered at this meeting is the election of the 10 directors nominated by the Board of Directors.
We are pleased to be joined today by all nominees described in the proxy statement, except for Craig Rogerson, who is unable to participate. Proposal 2 is an advisory vote to approve compensation of the named executive officers as disclosed in our proxy statement. Proposal 3 is the request by the company to ratify the Audit Committee's appointment of Deloitte and Touche LLP as the independent registered public accounting firm of PPL and its subsidiaries for the year 2020. We are pleased to have representatives of Deloitte and Touche with us on the phone also today. Next, we will consider 1 shareowner proposal, The proponent of the shareowner resolution, if he wishes, will have the opportunity to make the short statement about this proposal.
I ask that the proponent statement be limited to 3 minutes. The share in the proposal is to adopt the policy requiring an independent Board Chair. I understand we have a representative of the proponent on our call this morning. Would you please state your name and the proponent's name and present the proposal?
Thank you, and good morning. My name is Jesse Alba, and I am presenting on behalf of Mr. Kenneth Steiner. Proposal 4, Independent Board Chairman. Shareholders request that the Board of Directors adopt a policy and amend the governing documents as necessary to require that the Chairman of the Board be an independent member of the Board whenever possible.
Although it would be better to have an immediate transition to an independent Board Chairman, the Board would have the discretion to phase in this policy for the next Chief Executive Officer transition. This proposal topic won 52% support at the 2020 Boeing Annual Meeting and 48% support at the Prudential Financial Annual Meeting yesterday. This proposal topic received 40% support at the 2015 PPL Annual Meeting. This 40% support represented nearly a majority vote from the shareholders who had access to independent proxy voting advice. And since the significant 40% vote in 2015, we still have the same Chairman and CEO and the same Lead Director with a declining stock price in a mostly robust stock market.
Our Chairman and CEO and our Lead Director received the most negative votes of any of the PPL Directors in 2019. The PPL Lead Director is clearly no substitute for an independent Board Chairman. PPL is overdue for a change to an independent Chairman of the Board. Please vote yes, Independent Board Chairman Proposal 4. Thank you.
Thank you. The Board of Directors has considered your proposal. For the reasons stated in the proxy statement, the Board recommends a vote against this proposal. If you have not yet voted your shares, you may vote now by clicking on the Vote Here button on your screen. We will now pause to allow shareowners to vote.
Thank you for voting. I now declare the polls closed. Next on our agenda is a brief business update. In years past, they have devoted this time to highlight our prior year's performance and look ahead to the future. Today, however, I'd like to focus on PPL's response to COVID-nineteen.
Regarding last year, I refer you to our proxy statement and my message in the annual report, both of which summarize our business performance. In short, it was another successful year, one in which we delivered on our commitments to shareowners and customers, invested in the future, advanced our strategy for long term growth and success and added to our long track record of operational excellence. Today, however, 2019 seems like a distant memory as the world confronts a challenge unlike many of us have ever seen. Families are worried for loved ones, individuals and businesses are struggling financially and lives have been upended. In this moment, the service we provide has never been more important.
And just as a century of PPL employees before us rose to meet difficult challenges from the Great Depression to World War II, hurricanes and much more, today's team has leaned into this new challenge. We've done so with grit, determination, teamwork and creativity. First, I'm pleased to report that we have not experienced any operational issues to date and we've handled the 1st wave of spring storms in all three of our jurisdictions without issue and without mutual assistance from other utilities. We are confident the steps we have taken in response to COVID-nineteen will enable us to continue to deliver power and gas safely and reliably to our more than 10,000,000 customers in the U. S.
And the U. K, including all the healthcare facilities that are on the front lines of this pandemic. We thank each and every first responder, doctor and nurse for working tirelessly to end this pandemic and tend to our communities. They are all true heroes. As the first cases of coronavirus began to pop up in our communities, we moved to socially distancing and quickly adapted to new ways of working with almost 40% of our workforce shifting from PPL offices to work from home.
That represents over 4,500 of our employees. Our IT teams mounted a massive effort to build hundreds of lap times in short order and to roll out equipment so that many who weren't equipped to work from home could do so quickly. At the same time, we took extensive measures to protect those who could not work from home due to the nature of their jobs. Meanwhile, investments we've made in advanced meters, intelligent controls and automation have enabled us to quickly and efficiently complete work remotely and without direct interaction with customers. This in turn has protected employees and the public.
To date, PPL's swift response and continued vigilance have proven effective. As a result of our actions, support from our local labor unions and our employees' outstanding flexibility and professionalism, we've experienced just a handful of positive COVID-nineteen cases across our team of more than 12,000 employees. In addition, the number of employees self isolating has been very manageable and has decreased significantly in the past few weeks. Our absenteeism levels across the company are currently below normal levels. Our employees understand the critical role we play in keeping the lights on and power flowing no matter how difficult the challenge.
And in a time when peace of mind is hard to come by, the reliability we continue to provide means one less thing that customers have to worry about in an uncertain world. As we discussed on our Q1 earnings call last week, PPL is well positioned to manage the anticipated economic downturn brought on by COVID-nineteen. Our low risk rate regulated business model offers stability. And the billions we have invested in our networks over the past decade allow us the flexibility to adjust our capital plans if necessary while maintaining superior reliability. Financially, our liquidity position is strong and we've taken further steps to bolster that position, reflecting our ability to access capital markets even in times of stress.
We have no significant debt maturities in the near term. And at this point, we don't expect any issues in our ability to refinance debt when required. Further, our dividend remains very attractive, especially in the current equity market environment. Regarding earnings, it's too early to predict clearly what the pandemic's impact may be and we don't know how long it may last and how deeply it may continue to impact the economy. However, while it's impossible to predict the pandemic's full scope and duration, we remain confident in our ability to weather the economic storm as we confront the challenge of COVID-nineteen.
In addition, we remain committed to supporting customers who may be struggling financially through these difficult times. One of the hallmarks of PPL for 100 years has been our strong connection to the communities we serve. That comes in part with providing a service that is essential to everyday life, but PPL's connection runs deeper than that. We live and work alongside those we serve. They are our neighbors.
They are our family. They are hardworking people who reflect the value so deeply rooted in the regions where we operate. And they are our partners in making the world a better place. We understand that we succeed when they succeed. That is why our foundations and business units in Pennsylvania, Kentucky and the UK have pledged $1,600,000 combined donations, coronavirus relief funds and programs that help customers with financial hardships.
This is in addition to the millions that we typically donate annually to support our communities. It's why we have suspended disconnects and new late fees and work to reconnect service for customers who have previously been disconnected. And it's why we will continue to offer payment assistance programs and other services to help customers manage their energy bills. Going forward, we know the road will not be easy for many and we will continue to look for opportunities to support our local communities and to help them through this challenge. In closing, our industry and our company have talked to great lengths about grid resilience.
The crisis we face today, however, demands a different kind of resilience. It requires resilience from each and every one of us at PPL. We have demonstrated this resilience when mother nature has thrown her worst status. Now coronavirus has upped the ante. We're rising to the challenge again and we will prevail.
If you could see your company and its employees as I do each day, I'm confident you would be as proud of them as I am and how they've responded. I know we all hope for a quick end to the current circumstances. In the meantime, we will ready ourselves for any outcome and do what we do best at PPL plan, prepare, support one another and deliver for those we serve. I remain very confident in the long term prospects for PPL. Thank you for your continued trust and confidence in us as we execute our strategy and grow your company moving forward.
I would now like to ask the Judge of Election to submit her report.
Thank you. Mr. Chairman, the Judge of Election of the 2020 Annual Meeting of Shareowners of PPL Corporation hereby reports that the individuals listed in the company's proxy statement as nominees for directors each received more than 333,000,000 votes and that nominees John W. Conway, Stephen G. Elliott, Raja Rajmanar, Craig A.
Rogerson, Vincent Sorgy, William H. Spence, Natika Von Altham, Keith H. Williamson, Phoebe A. Wood and Armando Zagallo de Lima have been duly elected directors of the company to hold office until the next annual meeting of share owners. The judge of election reports that the company's proposal to approve the compensation of named executive officers has been approved by shareowners receiving more than 510,000,000 votes.
The judge of election reports that the action of the Board of Directors in the appointment of Deloitte and Touche LLP as the independent registered public accounting firm for the year ending December 31, 2020 has been duly ratified. The judge of election also reports that the shareowner proposal to adopt a policy to require an independent chairman of the board was not approved by shareowners. Thank you.
Thank you very much for your report and for assisting us today. At this point, I declare the formal portion of our annual meeting concluded. We'd like to take your questions now. As a reminder, shareowners who would like to ask a question may do so by typing your question into the box at the bottom of the screen. We've allotted up to 15 minutes to answer questions today.
Any questions pertinent to the meeting and not answered during or prior to the meeting will be posted with answers on our website as soon as practical after the meeting and will remain available until 1 week after posting. Brian Hill from our Corporate Communications Group will read questions submitted by shareowners. Brian, do we have any questions?
Thank you, Bill. Yes, we have received some questions. And we received a number of questions related to PPL's dividend. Specifically, are future payments safe? And do we have any plans to cut dividends?
Thanks for that question. As I mentioned earlier in my prepared remarks, we believe we're very well positioned to manage the economic downturn associated with the pandemic and we maintain an attractive dividend, especially in the current equity market. Our dividend continues to be an important piece of our overall share in return and the current environment surrounding COVID-nineteen hasn't changed that view. As discussed on our year end earnings call, we expect to modestly grow the dividend moving forward in order to work the payout ratio down and we will continue to assess the rate of growth in conjunction with market conditions, payout ratios and our credit profile.
Thank you, Bill. Next question, we've had several actually questions related to the Board, namely why do we have as many Board members as we have? What qualifications do they bring? Are this year's nominees new to the Board? And why do Board members get paid?
Okay. Thanks, Ryan. That's got a lot of parts to it. So let me see if I can cover all of them. Let me first start by saying how proud I am of PPL's Board of Directors.
We've got a really strong engaged independent and diverse Board, which I think has the right blend of experience, skills and perspectives that can oversee the company's continued growth and success. That includes newer directors as well as experienced directors who over the past decade have helped lead the company through an exceptional transformation into one of the largest investor owned utility companies in the U. S. Under the Board's leadership, we've not only weathered difficult challenges, but grown seizing opportunities to both preserve and create value for shareowners. As for the skills, experience and qualifications they bring, I can tell you that our directors all bring senior leadership experience with several having served as CEOs of major companies.
Many of our directors bring a global business perspective as well. Collectively, if you look across our board, we have broad financial, risk management, customer relations, marketing and technology experience. And in addition to that, we've got Board members experienced at leading companies in regulated environments. Again, it's a Board in my view with the right mix of skills and experience to guide our corporate strategy. We do have brief bios and details of each of the members' qualifications in our proxy statement and they're also on our website.
That's www.pplweb.com. I would also note that the bios of our senior leadership can be found on the website as well. Regarding the board size, PPL's board is actually slightly smaller than the average board of the roughly dozen peer companies that we often benchmark ourselves against in our sector. And on balance, I'd say our board size allows not only for the right blended skills and diverse perspectives that I talked about earlier, but still also allows us to be efficient and effective in how we function. And I think that balance is very important.
As for whether our directors are new, I would note that the only new addition to our Board in this year's nominees is Vince Sorgy, who will succeed me as CEO on June 1. Congratulations, Vince. Regarding the last question about why Board members are paid, we pay Board members in order to attract appropriately qualified individuals and directors of publicly traded companies are paid for their services. So I think, Ryan, I've covered most of that question, hopefully all actually.
You did, Bill. Thank you. Looking at our next question, deals with PPL's stock price and asks why PPL's 5 year cumulative total return has consistently trailed the broader EEI index of investor owned utilities in recent years?
Yes. I would say, Ryan, in short, it really boils down to our U. K. Portion of our business where we've seen a lot of political and regulatory uncertainty in recent years, with probably the biggest factor being the 2016 Brexit referendum. The referendum and the political turmoil that followed that lasted actually for more than 3 years and even continues on and had a significant impact on the pound and investor confidence in the UK.
And recall that about 50% of our earnings come from the U. K. And we have to translate pounds into U. S. Dollars and so that impact that Brexit has had on the pound is important and it's been significant unfortunately in the negative direction.
So that in turn has disproportionately affected PPL stock price relative to other U. S. Investor owned utilities despite the fact that we are the number one operator of distribution networks in the U. K. So that operational excellence that we're known for continues even despite some of these regulatory and political uncertainties that we faced in the UK.
With that being said, the end of 2019, I think offered a light at the end of the tunnel as much of the UK political uncertainty that weighed on our stock for years was lifted, the country's December 12th general election delivered the U. K. Conservative party really an overwhelming majority and that in turn cleared the way for the UK's exit of the European Union and virtually eliminated any threat of energy sector renationalization that had been an issue raised by the minority Labour Party. We've said all along that we believe the UK political and regulatory uncertainty would be short term. We continue to believe that today we are positioned very well with Western Power Distribution for long term success and they have future opportunities that we think are really going to help shareowners in the long run.
And as I mentioned earlier in my remarks, we remain very confident overall in the long term prospects for PPL. I think that's it for that one. Brian, do we have another question?
Thank you, Bill. We've received 2 questions that are related to compensation and the nature of those whether the company is considering any cuts to Board or executive compensation given the current environment?
Sure. Well, we are an essential service as you could imagine, and especially in this time of extreme uncertainty and distress for our customers, it's really important that we maintain that. So, it's critical. We keep the energy flowing for the healthcare facilities in our service territories as they are literally on the front lines fighting this coronavirus. As a result, we are not considering any changes to compensation at this time nor have we furloughed or laid off any of our employees as they are working tirelessly to ensure we deliver for our customers and our communities at large.
We're very conscious, however, of the challenges that this poses for many of our customers and that's why we've taken the steps that I outlined earlier in my remarks, supporting those struggling with financial hardships. That includes donating to relief funds, suspending disconnects and new late fees and offering payment assistance programs and services to help customers manage their energy bills. And we're going to continue to look for opportunities where we can support our communities going forward.
Thank you, Bill. The next question deals with the compensation and notes that we compare our CEO compensation to the median worker salary in the proxy statement. And the question asked is how does executive compensation compare to the lowest paid PPL worker?
Quite honestly, that's not something we've analyzed. Our focus has been on comparing the CEO's total annual compensation to the median employees' compensation and that's actually required by the Dodd Frank Act and was put into place several years ago. And as we look across the Philadelphia Stock Exchange Utility Index at companies that have reported CEO pay ratios, we find that our CEO pay ratio is actually below the median of companies in the UTY.
Thank you, Bill. Next question deals with CO2 emissions. The company recently increased its CO2 goal to an 80% cut in CO2 emissions by 2,050. And the question is, is there any chance PPL may be able to make even bigger cuts or is 80% really a best case scenario?
Yes, thanks for that question and that's a really good one. Across PPL, we continue to position our utilities to fight climate change in a manner that balances the needs of our customers and the environment. In February, in fact, we announced a more aggressive goal to reduce carbon emissions targeting a reduction of at least 80% from 2010 levels by the year 2,050. That's up from our prior goal, which we set back in January of 2018 of a 70% cut over the same period. This new goal reflects our ongoing resource planning activities in Kentucky, including our updated forecast of energy cost.
And as we are looking ahead, we're seeing a glide path that has already resulted in a 56% reduction in our CO2 output through the end of last year and we anticipate at least a 70% reduction by 2,040. I think it's also important to note that the targets we've set are based on current economics and technologies as well as current legislation and regulation. And so for that reason, we believe these targets are really credible and we're confident that we can achieve them. Of course, if there are additional advancements in technology, which I personally think there will be, or if the cost of renewables continues to drop as we've seen, then in those circumstances, I think you could see an even greater CO2 reduction than what we're currently targeting. I think the bottom line here is as we confront climate change, we're committed to doing our part to advance a cleaner energy future.
Thank you, Bill. And we've received a few questions that are related to a pipeline project in our Kentucky service territory, LG and E's Bullock County pipeline project. So let's see, in the first question, the shareowner writes, we were alerted to the company's plan to make a major capital investment in a pipeline through the Bernheim Forest. And then the question goes on to say, this information raises serious concerns about the risk to the company's reputation in the Louisville community. How is this pipeline consistent with the company's commitment to reduce greenhouse gas emissions by 80% and with the electric power industries move toward 0 net emissions by mid century?
Yes, thanks for the question. I can tell you that Louisville Gas and Electric and Kentucky Utilities, both located in the state of Kentucky and PPL as a whole remain committed to a cleaner energy future, including reducing our carbon emissions 80% from 2010 levels by 2,050 as I responded in a previous question. We've also remained committed to enhancing our systems so we can provide this safe, reliable and in many cases much needed energy services that our customers are requesting of us and are continuing to count on us to provide. This natural gas pipeline project is primarily to supply residential, commercial and light industrial use. It's necessary to continue to serve our existing customers reliably as well and to meet some of the growing demand that we see in that area.
And it's not I should point out it's not for power generation. I should also point out that natural gas in terms of emissions compared to a coal generating plant emits about 50% less carbon than coal generation does. So its carbon footprint is much lower than coal, for example. Our climate commitment also is to reduce those carbon dioxide emissions that we produce as I indicated. And for us, this is overwhelmingly related to the electric power generation sector of our business.
The gas distribution pipeline will not affect our ability to reach our stated goals and actually could help in terms of natural gas itself could actually help the electric power industry get to net 0 emissions quicker over on a glide path reaching into the 2,040 to 2,050 timeframe. So I think overall, as I look at the reputational risk, I think it's low. I know that not everyone is happy with projects that we believe are necessary in the best interest of all of our customers. I understand that, but I think when we do our work and in construction in particular, we do it with the environment in mind. I think our environmental track record is very good and we are always willing to listen to customers' concerns and we try to address those as best we can.
So Ryan, that's all I had I think for that question.
Thank you, Bill. And then the next question again, same project here. It notes that the Louisville Metro Government has passed a resolution calling for 100% renewable energy supply in Louisville and the entire surrounding county by 2,040. And it says notes that at the same time Louisville Gas and Electric is This will This will request this will generate ill will for the company and the questioner looks for an explanation as to how senior PPL management projects that it can be profitable to pursue such an unpopular fossil fuel infrastructure near a jurisdiction, which has made a clear and powerful request for the company to move to clean renewables in order to adapt to the economy of the future?
Thanks for that question. I know our senior team at LG and E has worked very closely with the Louisville Metro Government, providing them with information about what it would look like to reach the 100% renewable energy goal. Additionally, LG and E and KU have in recent years provided a number of renewable offerings for our customers. And in fact, we have the largest universal solar array in the state of Kentucky. As you can appreciate, the Louisville Metro is putting forward a substantial goal, an aggressive goal and undertaking many societal trade offs to determine the path to be taken.
We look forward to continuing to be an important player in that endeavor over the next many years. And meanwhile, the demand for natural gas and its reliability is growing in communities south of Louisville. We believe we've responsibly considered all factors in our plans to meet these customer as well as our community needs.
Thank you, Bill. And I think we've reached the end of our 15 minute Q and A period. So I'll just ask you one last question here. And then as you noted earlier, any pertinent questions that we may have received that we haven't gotten to, we'll post answers to those on our website. So the last question here is why the Board recommends that shareowners vote in a particular way on the shareowner proposal.
Can you comment on that?
Sure. Well, we believe it's important for shareowners to understand the Board's view on shareowner proposals and whether the Board believes a specific proposal is in the best interest of all the shareowners. As included in the proxy statement, the Board of Directors outlines its rationale for making those recommendations. I would also note it's very common for companies to provide recommendations such as these. I would also say that we routinely attempt to work with proponents to address their proposals.
In fact, in the past, in some cases, we are able to do that successfully and not require the proponents proposal to go to a shareowner vote. Of course, it's up to each shareowner to decide how they wish to vote on proposals that are included in our proxy statement. So with that, Brian, thanks for helping out with the questions. I appreciate that. And that concludes the Q and A portion of our meeting.
In closing, I would note that this will be the last annual meeting led by me as PPL's Chief Executive Officer. As we announced in February, I will be retiring as CEO on June 1 and will become Non Executive Chairman of the Board. Vince Sorgy will become President and CEO of PPL at that time. It's been an honor to lead the tremendous teams of PPL over the years. I'm convinced that they are among the very best our industry has to offer and I know how dedicated they are to making life better for our customers and our communities.
As we look to the future, I'm confident our company will be in good hands led by Vince, guided by our outstanding management team, supported by our employees in the U. S. And the U. K. And committed to delivering for you going forward.
I thank all of you for participating in today's meeting and for your continued support of PPL Corporation. I will now declare the meeting adjourned.
Ladies and gentlemen, this does conclude the program and you may all disconnect. Everyone have a great day.