GROW with US Essential Utilities, Inc
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GROW WITH US Essential Utilities, Inc. 2021 Annual Meeting of Shareholders NYSE: WTRG 47998_EU_Proxy-21_Covers_4c_v6.indd 1 3/19/21 4:26 PM OUR KEY PILLARS Infrastructure We are committed to thoughtful and continuous investment in the infrastructure that delivers water and wastewater service and natural gas to our customers safely and reliably. Operations We are committed to responsibly leveraging our industry expertise, purchasing power, economies of scale and efficiencies and to operational excellence benefiting our customers and shareholders. Environment We take our role as a provider of water and natural gas very seriously, and we return wastewater safely back to the environment. We are committed to sustainable business practices that protect these valuable natural resources and work to ensure the environment is safeguarded for future generations. Safety We are committed to creating a culture that empowers employees to prioritize their safety and well-being and the safety of others above all else. We strive for safe treatment and delivery of water and gas to each customer we serve. 47998_EU_Proxy-21_Covers_4c_v6.indd 2 3/19/21 4:26 PM March 22, 2021 To Our Shareholders On behalf of your Board of Directors, I am pleased to invite you to attend the 2021 Annual Meeting of the Shareholders of Essential Utilities, Inc. to be held virtually on Wednesday, May 5, 2021. I’m sure you will agree that 2020 was a transformative year for the company, as well as the country. Just as the COVID-19 pandemic began to sweep the U.S. and the country started to shut down and begin social distancing, Essential completed our momentous acquisition of Peoples Natural Gas. Despite the challenges of the pandemic, I am pleased to report that the new combined company performed admirably, and we continued providing a high-level of service to more than 5 million people and invested nearly $900 million in new infrastructure. Our first priorities during the pandemic were to ensure the health and safety of our employees, and to continue delivering utility services to our customers. Essential activated a work from home model in mid-March. For those who needed to be physically present on job sites, we provided personal protective equipment (PPE), adjusted our operations to limit employee and customer interactions and increased cleaning and sanitation practices in our open facilities. As a vital partner in the communities we serve, we could not sit idly by while so many of our neighbors suffered. In April, we donated $290,000 to food banks in each of the 10 states we serve customers, ensuring the donations were felt on a local level. Understanding how the pandemic financially impacted our customers, we expanded our low-income assistance programs to help customers continue to receive our services. Through the Essential Foundation we were able to provide over $4 million of assistance to the communities we serve. While addressing safety and continuous services was a priority during COVID-19, Essential continued to grow. With the acquisition of Peoples, we welcomed 740,000 customers and more than 1,500 employees in Pennsylvania, West Virginia and Kentucky. We also closed six water and wastewater Christopher H. Franklin system acquisitions in Ohio, North Carolina, Pennsylvania and Illinois. These acquisitions totaled nearly 4,000 water customers, more than 8,000 wastewater customers and an opening rate base of nearly For 135 years, it has been $63 million. our mission to be the Essential is committed to being responsible stewards of our environment, maintaining a best possible provider safe, diverse, and respectful culture, and overseeing the governance of Essential with the of essential resources utmost transparency. To that purpose, we have added a Diversity metric to our 2021 Short- by serving the needs term Incentive Plan to tie executive compensation to our diversity goals. and expectations of our In the Fall of 2020, we expanded our formal Environmental, Social and Governance (ESG) reporting. customers, shareholders, Our ESG report, which can be found at www.ESG.Essential.co, details our progress on our goals, employees and the including our intention to use 100% renewable energy to power water and wastewater operations communities we serve — in four states by 2022, and our company-wide PFAS standard of 13 ppt in drinking water. By 2035, our goal is to reduce our emissions by 60% from our 2019 baseline. We also amplified our diversity, both today and for future equity, and inclusion efforts by formalizing our commitments in a multi-year plan to nearly double our generations. diverse supplier spend to 15% of our spend and increase employee diversity by 20% in the coming years, reflecting the diversity of the communities in which we work. I am proud of the work we accomplished during such a challenging year. In 2021 we will proudly celebrate the 135th anniversary of our company and we look forward to all we can accomplish during the next 135 years. We hope you’ll join us to hear more about Essential’s bright future on May 5th. Thank you for your confidence in Essential! Sincerely, Christopher H. Franklin Chairman, President and Chief Executive Officer ESSENTIAL UTILITIES, INC. 2021 PROXY STATEMENT 1 Notice of Annual Essential Utilities, Inc. 762 W. Lancaster Avenue Meeting of Shareholders Bryn Mawr, Pennsylvania 19010 Purpose Virtual Annual Meeting of The Annual Meeting of Shareholders of Essential Utilities, Inc. (the Company) will be Shareholders held for the following purposes: Wednesday, May 5, 2021 To elect eight nominees for directors; 8:00am Local Time 1 To ratify the appointment of PricewaterhouseCoopers LLP as the independent Record Date 2 registered public accounting firm for the Company for the 2021 fiscal year; March 8, 2021 3 To approve an advisory vote on the compensation paid to the Company’s named Due to public health concerns executive officers for 2020; about COVID-19 and to support the health and safety of our 4 To ratify the Amendment to the Company’s Bylaws to permit shareholder access to shareholders and employees, this the Company's proxy statement; and year’s Annual Meeting will be conducted virtually, entirely by 5 To transact any other business as may properly come before the meeting or any live audio broadcast. adjournments or postponements thereof. To attend, go to: www. virtualshareholdermeeting.com/ Who can vote WTRG2021 and log in using the control number on your Notice of Only shareholders of record at the close of business on March 8, 2021 will be entitled Internet Availability, proxy card or to notice of, and to vote at, the meeting. voting instruction form. The list of shareholders will be Your vote is important available for inspection upon request, by contacting us at We urge each shareholder to promptly sign and return the enclosed proxy card, or to www.essential.co/investor-relations use telephone or internet voting. Shareholders will have the same See our Questions and Answers about the Annual Meeting and the voting section of opportunities to participate as they would at an in-person meeting, with the proxy statement for information about voting by telephone or internet, how to the opportunity to vote and ask revoke a proxy and how to vote your shares at the virtual annual meeting. questions on the matters discussed in this proxy statement. How to vote Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Online before the meeting* By phone* By mail Shareholders to be held on www.proxyvote.com In the U.S. or Canada Return your proxy card May 5, 2021. dial toll-free in the postage-paid Online at the meeting 1-800-690-6903 envelope provided The Notice of Annual Meeting, Proxy Attend the Annual Meeting virtually at www.virtualshareholdermeeting.com/WTRG2021 Statement and 2020 Annual Report and follow the instructions for voting to Shareholders are available at: www.essential.co/investor-relations * You have until 11:59 p.m. (ET) on May 4, 2021 to vote through the internet or by phone, and if you are a plan participant you have until 11:59 p.m. (ET) on May 2, 2021 to vote through the internet or by phone. If you vote by If you encounter any difficulties Internet or by Phone, you do not need to mail back your proxy card. accessing the virtual meeting during the check-in or meeting time, please By Order of the Board of Directors, call the technical support number that will be posted on the Virtual Shareholder Meeting login page. Christopher P. Luning Secretary March 22, 2021 2 ESSENTIAL UTILITIES, INC. 2021 PROXY STATEMENT Contents Proxy Summary 4 Proposal 1 Election of Directors 10 Corporate Governance 17 Shareholder Outreach 24 Environmental Stewardship and Corporate Responsibility 25 Governance Policies and Practices 31 Director Compensation 35 Ownership of Common Stock 37 Proposal 2 Ratification of the Appointment of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm for Fiscal 2021 38 Audit Committee Report 39 Proposal 3 Advisory Vote to Approve Named Executive Officers’ 2020 Compensation 40 Executive Compensation (see separate table of contents) 41 Proposal 4 Ratification of an Amendment to the Bylaws Establishing a Standard for Shareholder Access to the Proxy Statement 85 Annual Meeting Information 86 Questions and Answers about the 2021 Annual Meeting 86 Nominating Candidates for Director 90 Communications with the Company or Independent Directors 91 Additional Information 91 Other Matters 91 Appendix A Essential Utilities Peer Group of Companies A-1 Appendix B Reconciliation of Non-GAAP Financial Measures B-1 Appendix C Amendment to Essential Utilities, Inc.’s Bylaws C-1 Forward-Looking Information This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).