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United States – Retail/WholesaleOverview of 2011 Product Portfolio and Survey Methodology

David Wathen and Eric ZitanerMarch 3, 2011

Towers Watson Data Services

United States – Energy ServicesOverview of U.S. Compensation Data Bank (CDB) Energy Services Survey


Towers Watson Data Services Agenda

CDB Product Overview

Enhancements for 2011

Survey Job Structure

MMPS Survey Methodology

Job Matching

Energy Industry Trends

Participation Process

Survey Results

Questions and Comments

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Towers Watson Data ServicesCDB Product Overview


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Towers Watson Data Services Geographical Breadth – Survey coverage in over 100 countries

CanadaUnited States

AlbaniaAlgeriaAustriaAzerbaijanBahrainBelarusBelgiumBosniaBulgariaCroatiaCyprusCzech RepublicDenmarkEgyptEstoniaFinlandFranceGeorgiaGermanyGhanaGreeceHungary

IraqIrelandIsraelItalyIvory CoastJordanKazakhstanKenyaKuwaitLatviaLebanonLibyaLithuaniaLuxembourgMacedoniaMoldovaMontenegroMoroccoNetherlandsNigeriaNorway

OmanPolandPortugalQatarRomaniaRussiaSaudi ArabiaSenegalSerbiaSlovakiaSloveniaSouth AfricaSpainSwedenSwitzerlandTunisiaTurkeyUkraineUnited Arab EmiratesUnited Kingdom

ArgentinaBrazilChileColombiaCosta RicaDominican RepublicEcuadorEl SalvadorGuatemala

HondurasMexicoNicaraguaPanamaPeruPuerto RicoTrinidad & TobagoUruguayVenezuela

AustraliaBangladeshCambodiaChinaHong Kong IndiaIndonesiaJapanKoreaMalaysia

New ZealandPakistanPhilippinesSingaporeSri LankaTaiwanThailandVietnam

Europe, Middle East and Africa

Latin America

North America

Asia Pacific

Over 35,000 organizations participate, providing data on 9.2 million incumbents worldwide

Hernan Ventura

Jasbir Singh

Jeric Ramos

Marc McBrearty


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Towers Watson Data Services Compensation Data Bank (CDB)

Middle Management, Professional and Support Compensation Survey

• Functions and Disciplines reported by Career Level with reference to corresponding Global Grades

• Single data solution for support through middle management levels• Globally adopted methodology• Total direct compensation

Executive Survey• Executives reported by benchmark jobs• Long-term incentive values by benchmark and pay level• Total direct compensation• Results by organization unit by revenue

Leveling Approach

FunctionsDisciplines

Career Levels

Benchmark Job Approach

Exec. Benchmarks Scope Measures


Towers Watson Data Services Long-Term Incentives

Towers Watson is a leader in long-term incentive expertise. In the U.S. market, we have been valuing long-term incentives for over 30 years

The CDB surveys collect long-term grants for all employee levels; providing a complete picture of the expected value of long-term incentives from the CEO to the lowest eligible salary level

Expected values are presented by pay level and also:Executive Benchmarks in the Executive SurveyFunction/Discipline/Career Level in the MMPS Survey

Accounting value is our standard methodology; we also have a proprietary valuation methodology

Long-term incentive policies and practices have been enhanced this year based on the extensive coverage in both of our legacy databases

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Towers Watson Data ServicesCDB Energy Services and General Industry Survey Integration

CDBGeneral IndustryDatabase

CDBEnergy ServicesSurvey Report

CDBGeneral IndustrySurvey Report

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Towers Watson Data ServicesEnhancements for 2011


Towers Watson Data ServicesCDB Energy Services Enhancements for 2011

Executive Benchmark job codes changed to be compatible with MMPS

Enhanced leveling methodologyCareer Bands replace Career LaddersGlobal Grades underpin Career Levels and Executive Benchmarks

Support Career Levels added ─ three new Career BandsTechnical Support (T1−T4)Business Support (U1−U4)Production/Operations (W1−W4)

New AAT Administrative Transportation Services Function separated from AAS Administrative Services

Reconfigured/recoded Finance Functions/Disciplines

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Towers Watson Data ServicesCDB Energy Services Enhancements for 2011 (continued)

Moved Modeling, Forecasting and Economic Analysis and Business Operations Analysis to General Industry (AEM and AEO)

New All Industry Disciplines

Select GI Disciplines recoded to stay below the 200 number series (e.g., AHR)

CDB Renewable/Alternative Energy Survey jobs now covered in the CDB Energy Services Survey

New/enhanced Energy Functions/DisciplinesETM Electric Transmission Construction and/or Maintenance

ETO Electric Transmission Operations

APM080 Emerging Technologies Acquisition and Implementation Project Management

ARE500 Conduit Joint Use Agreement Coordination

AZT505 Geographical Information Systems (GIS) Technical Specialty

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Towers Watson Data ServicesNew Function: AAT – Administrative Transportation Services

2010

AAS Administrative Services

AAS000 Administrative Services Generalist/Multidiscipline

AAS010 Office/Location Services

AAS020 Library/Information Services

AAS050 Aircraft Management

AAS060 Aviation − Pilots

AAS070 Food Services

AAS080 Vehicle Fleet Management

2011

AAT Administrative Transportation Services

AAT000 Administrative Transportation Services Generalist/Multidiscipline

AAT010 Vehicle Fleet Management

AAT015 Vehicle Maintenance

AAT020 Driver/Chauffeur

AAT030 Aircraft Management

AAT040 Aviation Operations

AAT050 Aviation − Pilots


Towers Watson Data Services Finance Functions Reconfigured

2010

AFA Accounting, Credit and Collections

AFT Financial Analysis, Audit and Tax

2011

AFA Finance

AFB Accounting

AFC Credit and Collections

AFT Financial Analysis and Tax

AFU Audit and Financial/Business Controls

AFY Risk Management

AEC Economics


Towers Watson Data Services Two Functions Moved To All Industry

2010

EBM Modeling, Forecasting and Economic Analysis

EBO Business Operations Analysis

2011

AEM Modeling, Forecasting and Economic Analysis

AEO Business Operations Analysis


Towers Watson Data Services New All Industry Disciplines

AAS011 Clerical

AAS012 Word Processing/Presentations

AAS013 Print Services

AAS030 Receptionist/Switchboard

AAS040 Secretarial/Executive Administrative Assistance

AAS050 Travel Services

AAS072 Food and Beverage Service

AAS074 Food Preparation

AAY002 Security Armed

AAY003 Security Unarmed

AHR105 Employee Assistance Program Administration

AID055 Application Development Support

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Towers Watson Data Services New All Industry Disciplines (continued)

AIT085 Data Control

AIT086 Data Entry

AMK025 Advertising

AMK028 Marketing – Sponsorship

AMK110 E-Commerce Marketing

AMK111 Internet Search Optimization

AMK112 Social Media Marketing

AMK114 Website Traffic Analysis

AMS022 Customer Contact Center – Complaints Escalation

AMS024 Customer Contact Center Planning and Monitoring

AMS026 Customer Contact Center Process Improvement

AMS090 Customer Contact Center Training/Coaching

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Towers Watson Data Services ETM – Electric Transmission Construction and/or Maintenance

2010

ETM000 Electric Transmission Construction and/or Maintenance Generalist/Multidiscipline

ETM010 Electric Transmission Equipment Testing

ETM020 Electric Transmission Equipment Repair

2011

ETM000 Electric Transmission Construction and/or Maintenance Generalist/Multidiscipline

ETM002 Electric Transmission Construction

ETM004 Electric Transmission Maintenance

ETM010 Electric Transmission Equipment Testing

ETM020 Electric Transmission Equipment Repair


Towers Watson Data Services ETO – Electric Transmission Operations

Detailed language in the Generalist/Multidiscipline moved to new ETO005 Electric Transmission System Operations – Reliability Discipline

Deleted ETO010 Electric Transmission System Operations – Load Balancing and Generation Dispatch since it blended too many responsibilities

Removed “ISO/RTO” from ETO020 and ETO030 titles

ETO000 Electric Transmission Operations Generalist/Multidiscipline

ETO005 Electric Transmission System Operations – Reliability

ETO014 Electric Transmission System Operations – Interchange Scheduling / Load Balancing

ETO016 Electric Transmission System Operations – Generation Operations

ETO020 Reliability Coordination

ETO030 Electric Transmission Tariff Administration

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Towers Watson Data ServicesSurvey Job Structure


Towers Watson Data ServicesGeneral Industry Functions

All IndustryCode FunctionAAA + Top ExecutiveAAB + Profit Center ManagementAAS Administrative ServicesAAT + Administrative Transportation ServicesAAY SecurityACA Corporate Affairs/CommunicationsACD Strategic Planning/Corporate DevelopmentAEC + EconomicsAEM + Modeling, Forecasting and Economic AnalysisAEO + Business Operations AnalysisAFA + FinanceAFB + AccountingAFC + Credit and CollectionsAFT + Financial Analysis and TaxAFU + Audit and Financial/Business ControlsAFY + Risk ManagementAGA + General AdministrationAHR Human ResourcesAHS Environmental, Health and SafetyAIC + Information TechnologyAID IT DevelopmentAIT IT AdministrationALG LegalALS Legal SupportAMJ+ Sales and MarketingAMK MarketingAMS Customer Support/OperationsAMT Technical Customer SupportAPA Plant AdministrationAPM Project/Program ManagementAQY Quality Assurance Methods

Customer/Client Management and Sales Code FunctionCAM Account ManagementCBM Bid ManagementCDM Client Service Delivery ManagementCSD Direct SalesCUS Sales Support and AdministrationCUT Technical Sales Support

+ New or Revised/Recoded Function

ARE Real Estate and FacilitiesASC Supply Chain ManagementAZA + Engineering and ConstructionAZC + ConstructionAZE EngineeringAZT Technical Specialty/Skilled TradeAZU + Manual/Unskilled Labor


Towers Watson Data ServicesEnergy Services Functions

Energy Services NuclearCode FunctionECG + Gas OperationsEDC + Distribution and Customer ServiceEDD Energy Delivery/DistributionEDE Energy Efficiency/ConservationEED + Territory ManagementEEM MeteorologyEFP + Power ProcurementEFS Energy SupplyEGD + Power Generation and DeliveryEGE + Power GenerationEGF + Fossil Power GenerationEGH + Hydroelectric Power GenerationEGR + Renewable/Alternative Power GenerationEML + Energy Marketing and TradingEMM + Energy Marketing EMT + Energy TradingEMU + Energy Trading Operations/SupportENP New Power Plant Development Project ManagementETG Gas TransmissionETM Electric Transmission Construction and/or MaintenanceETN + Transmission and Distribution SystemsETO Electric Transmission OperationsETS + Electric Transmission SystemsETT Electric System/Grid and Bulk Power TrainingEVM Vegetation Management and Forestry

Code FunctionNPA + Nuclear ExecutiveNPM Nuclear Plant MaintenanceNPO Nuclear Plant OperationsNQA Nuclear Quality AssuranceNRS Nuclear Plant Radiation SafetyNSA Nuclear Plant Administrative Support ServicesNST Nuclear Plant Technical Support ServicesNTR Nuclear Plant Training

+ New or Revised/Recoded Function


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Towers Watson Data Services Job Coding – Function, Discipline and Executive Benchmark

First letter of function codeA All functions included in multiple industriesC Customer/Client management and sales Industry specific Functions:E Energy, N Nuclear; M Media; P Pharma; T Technology (High Tech); F Financial Services; R Retail

Last two letters of the function code derived from title to maintain sequence and group related functions together

— AHR Human Resources— ACD Strategic Planning/Corporate Development

New functions for executive jobs responsible for multiple functions— AAA Top Executive— AAB Profit Center Management— AIC Information Technology— AMJ Sales and Marketing— NPA Nuclear Executive


Towers Watson Data ServicesJob Codes ─ Executive Benchmarks and MMPS Disciplines

For Towers Watson surveys globally, codes are consistent

Executives continue to be matched to Benchmarks while MMPS jobs are matched to Disciplines and Career Levels

Job codes are eight digits consisting of the function/discipline and level,for example:

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Top Compensation Executive

Senior Compensation Analyst

Function: AHR–Human Resources AHR–Human ResourcesDiscipline: AHR020–Compensation

Generalist/MultidisciplineAHR020–Compensation Generalist/Multidiscipline

Level: Executive-EX Professional Level – P3-CareerJob Code: AHR020-EX AHR020-P3


Towers Watson Data Services Supervisory/Management vs. Executive Career Band

Supervisory/Management(Operational)

Executive(Strategic)

Organization Strategy

Implements organization strategies through the effective direction and management of resources

Sets Discipline or area strategy consistent with established organization strategies

Ensures compliance with organization policies

Focuses mainly on the management and implementation of operational objectives that help achieve long term organization strategy

Accountable for business, functional, operational processes and/or program management

Primarily involved in the development, evolution and approval of the long-term vision across a market function, division, region or country (depending on scope of organization) or a Function

Establishes strategies for area of responsibility (i.e. corporate, regional, subsidiary)

Leads development of country or function strategies

Makes decisions on strategic investments

May be a board or executive committee member or will have a comparable level of influence

Functional Responsibility

Responsible for part of a function for a business segment. Reports to the most senior role within a major function for a business segment

Most senior level within a major function for a business unit

Impact on Organization

Impacts broader organization performance directly

Impact limited to own Discipline or area

Impacts broader organization performance directly

Compensation Program

Not covered by executive compensation programs Covered by executive compensation programs (e.g., executive long-term plans, perquisites, executive bonus plans)

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Towers Watson Data ServicesMMPS Survey Methodology


Towers Watson Data ServicesSurvey Methodology – MMPS

Integrated approach based on our two proprietary leveling methodologies, Career Map and the Global Grading System (GGS)

Career Levels within Career Bands are underpinned by (provide the foundation for) Global GradesCDB MMPS survey participants match to Career Levels and results are presented by Career Level Global Grades are not reported in North America, however, a reference with the alignment between Career Levels and Global Grade(s) is included

Career Bands and the individual Career Levels describe the responsibilities, scope and breadth of work, and impact on the organization for incumbents in specific jobs

Functions and Disciplines identify the content and purpose of your organization’s job. Functions represent a broad family of jobs, and disciplines within the function correspond to the area of specialization

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Towers Watson Data ServicesChanges for 2011 – MMPS

CDB MMPS now covers all levels below executive

Six Career BandsSupervisory/Management (M1−M5)Professional (P1−P6)Customer/Client Management and Sales (S1−S6)Technical Support (T1−T4)Business Support (U1−U4)Production/Operations (W1−W4)Many new FunctionsSelect Disciplines have been recoded

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NEW! Career Band

NEW! Career Band

NEW! Career Band

NEW! S6-Elite Expert

NEW! M5-Senior Group Manager


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Towers Watson Data Services General Career Level/Global Grade Alignment Map(without consideration for organization size)

Only match to Career Levels in North America. No need to match to individual Global Grades.

Executive in NA reported by Revenues


Towers Watson Data ServicesCareer Level Profiles

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M2Manager

M1Supervisor

M3Senior Manager

M4Group Manager

M5Senior Group Manager

● Coordinates and supervises the daily activities of business or technical support or production team

● Sets priorities for the team to ensure task completion; coordinates work activities with other supervisors

● Decisions are guided by policies, procedures and business plan; receives guidance and oversight from manager

● Typically does not spend more than 20% of time performing the work supervised

● Manages professional employees and/or supervisors or supervises large, complex technical or business support or production operations team(s)

● Is accountable for the performance and results of a team within own discipline or function

● Adapts departmental plans and priorities to address resource and operational challenges

● Decisions are guided by policies, procedures and business plan; receives guidance from senior manager

● Provides technical guidance to employees, colleagues and/or customers

● Provides leadership to managers, supervisors and/or professional staff

● Is accountable for the performance and results of multiple related units

● Develops departmental plans, including business, production and/or organizational priorities

● Controls resources and policy formation in area of responsibility

● Decisions are guided by resource availability and functional objectives

● Provides leadership and direction through Senior Managers and Managers

● Is accountable for the performance and results of:

● A large, strategically important discipline in an extremely large market

● Related disciplines or a medium-sized function in a large market or medium-sized division

● A medium-sized discipline or department in a major region

● Adapts and executes functional or departmental business plans and contributes to the development of functional or departmental strategies

● Decisions are guided by functional strategies and priorities

● Applies only to large international or global organizations

● Provides leadership and direction through Group and/or Senior Managers

● Is accountable for the performance and results of:

● A large, strategically important function in an extremely large market

● Diverse disciplines or departments within a large geography or division

● A large, strategically important discipline within a major region

● A medium-sized global corporate discipline or department

● Develops, adapts and executes functional or departmental strategy to achieve key business objectives in area of responsibility

● Decisions are guided by organization and functional strategies and objectives

Supervisory/Management (M1−M5)



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P2Intermediate

P1Entry

P3Career

P4Specialist

P5Master

P6Renowned Expert

● Performs routine assignments in the entry level of the Professional Career Band

● Typically requires a college or university degree or the equivalent work experience that provides knowledge and exposure to fundamental theories, principles and concepts

● Develops competence by performing structured work assignments

● Uses existing procedures to solve routine or standard problems

● Receives instruction, guidance and direction from others

● Requires knowledge and experience in own discipline; still acquiring higher level knowledge and skills

● Builds knowledge of the organization, processes and customers

● Solves a range of straightforward problems

● Analyzes possible solutions using standard procedures

● Receives a moderate level of guidance and direction

● Requires in-depth knowledge and experience

● Uses best practices and knowledge of internal or external business issues to improve products or services

● Solves complex problems; takes a new perspective using existing solutions

● Works independently; receives minimal guidance

● Acts as a resource for colleagues with less experience; may direct the work of other staff members

● Represents the level at which career may stabilize for many years or even until retirement

● Is recognized as an expert in own area within the organization

● Requires specialized depth and/or breadth of expertise

● Interprets internal or external business issues and recommends solutions / best practices

● Solves complex problems; takes a broad perspective to identify solutions

● Works independently, with guidance in only the most complex situations

● Progression to this level is typically restricted on the basis of business requirement

● Is recognized as an expert within the organization, both within and beyond own function

● Anticipates internal and/or external business challenges and/or regulatory issues; recommends process, product or service improvements

● Solves unique and complex problems that have a broad impact on the business

● Contributes to the development of functional strategy

● Leads project teams to achieve milestones and objectives

● Progression to this level is typically restricted on the basis of business requirements

● Operates with no supervision in a complex environment

● Is recognized as an external thought leader within strategic function or discipline

● Influences the strategy to address internal or external business and regulatory issues

● Proactively identifies, defines, and solves the most complex problems that impact the management and direction of the business

● Significantly influences functional strategy; may participate in the development of the product or division strategy

● Leads multidisciplinary projects or initiatives

● Progression to this level is typically restricted on the basis of individual capabilities and business requirements

Professional (P1−P6)



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S1Entry

S3Career

S4Expert

S5Senior Expert

S6Elite Expert

● Has general awareness of business, financials, products/services and the market

● Complexity is limited (territory/account, products/services, sales process)

● Has very limited authority/opportunity to set and negotiate product/service terms

● Relies on manager to provide planning and manage resources

● Is developing an understanding of business, financials, products/services, the market, or account needs

● Complexity is moderate (territory/assigned accounts, products/services, sales or account management process)

● Has moderate authority/opportunity to set and negotiate product/service terms

● Is beginning to plan own territory or account approach and monitor resources

● Has a solid understanding of business, financials, products/services, the market, and the needs of assigned accounts; may help develop colleagues' understanding; may be recognized as an expert in one area

● Complexity is high (territory/account, products/services, sales or account management process); may serve as team lead

● Has high level of authority/opportunity to set and negotiate product/service terms

● Plans own territory or account approach and manages own resources

● Has a deep understanding of business, financials, products/services, the market or the needs/challenges of assigned accounts

● Develops colleagues' and customers' understanding

● Recognized as an expert in one or more areas

● Complexity is extremely high (territory/account, products/services, sales or account management process); serves as team lead

● Has extremely high authority/opportunity to set and negotiate product/service terms

● Plans own territory or account approach and has input into colleagues' approaches; manages own and often others' resources

● Has an extremely deep understanding of business, financials, products/services, the market, and the needs/challenges of assigned accounts; develops colleagues' and customers' understanding; is recognized as an expert in many areas

● Works with large/important/global accounts

● Has full authority/opportunity to set and negotiate product/service terms

● Plans own account management approach and has input into colleagues' approaches; manages own and often others' resources

● Is recognized externally as a leading sales strategist and business expert, with highly sophisticated understanding of customer needs and competitors’ offerings

● Is recognized internally as a role model and leader in planning and executing successful sales strategies for the organization’s largest and most complex clients or markets

● Develops and implements new and innovative approaches to the sales process, including negotiation of sales and service terms, and approaches to account management and utilization of resources

● Leads projects or initiatives that extend beyond the sales organization

● Progression to this level is typically restricted on the basis of individual capabilities and business requirements

S2Intermediate

Customer/Client Management and Sales (S1−S6)



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T2Intermediate

T1Entry

T3Senior

T4Lead

● Has basic skills in an analytical or scientific method or operational process

● Works within clearly defined standard operating procedures and/or scientific methods and adheres to quality guidelines

● Works with close supervision

● Expands skills in own work area within an analytical/scientific method or operational process

● Applies experience and skills to complete assigned work within own area of expertise

● Works within standard operating procedures and/or scientific methods

● Works with a moderate degree of supervision

● Has developed proficiency in a range of processes or procedures through job-related training and considerable on-the-job experience

● Completes a variety of atypical assignments

● Works within defined processes and procedures or methodologies and may help determine the appropriate approach for new assignments

● Works with a limited degree of supervision

● Acts as an informal resource for colleagues with less experience

● Has advanced and specialized expertise, typically developed through a combination of job-related training and considerable on-the-job experience

● Completes assignments and facilitates the work activities of others; may coordinate work beyond own area

● Proposes improvements to processes

● Acts as a lead, coordinating the work of others ⎯ but is not a supervisor

● Works autonomously within established procedures and practices

Technical Support (T1−T4)



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U2Intermediate

U1Entry

U3Senior

U4Lead

● Entry level job with little or no prior relevant work experience

● Acquires basic skills to perform routine tasks

● Work is prescribed and completed with little autonomy

● Works with either close supervision or under clearly defined procedures

● Has developed knowledge and skills through formal training or considerable work experience

● Entry level often for those with work experience in the skill area

● Works within established procedures with a moderate degree of supervision

● Identifies the problem and all relevant issues in straightforward situations, assesses each using standard procedures, and makes sound decisions

● Has developed specialized skills or is multi-skilled through job-related training and considerable on-the-job experience

● Completes work with a limited degree of supervision

● Likely to act as an informal resource for colleagues with less experience

● Identifies key issues and patterns from partial/conflicting data

● Takes a broad perspective to problems and spots new, less obvious solutions

● Has developed expertise in a variety of work processes or activities typically developed through a combination of job-related training and considerable on-the-job experience

● Typically acts as a lead, coordinating the work of others, but not a supervisor


● Anticipates patterns and links; looks beyond the immediate problem to the wider implications

● Generates new and innovative solutions to complex problems

Business Support (U1−U4)



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W2Intermediate

W1Entry

W3Senior

W4Lead

● Entry-level job with little or no prior relevant experience

● Work is prescribed and completed with close supervision and little autonomy

● Duties are clearly defined and methods and tasks are described in detail

● Has developed skills through formal training or considerable work experience

● Works within established procedures with a moderate degree of supervision

● Has developed proficiency through job-related training and considerable on-the-job experience

● Completes work with a limited degree of supervision

● Likely to act as an informal resource for colleagues with less experience

● Has developed expertise, typically through a combination of job-related training and considerable on-the-job experience

● Typically acts as a lead, coordinating the work of others – but is not a supervisor


● Has developed a specialized level of skill to perform assigned tasks

Production/Operations (W1−W4)


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Towers Watson Data ServicesJob Matching


Towers Watson Data Services Job Matching Process for MMPS Jobs

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For Each Job

Align your internal structures to

Career Bands/Career Levels and review for

cross-functional consistency

Identify appropriate

Function (Job Family)

Select appropriate Discipline

(specialty within Function)

Select appropriate

Career Level based on your

alignment

Align internal structures

to survey levelsSelect

DisciplineIdentify

FunctionAssignCareer Level


Towers Watson Data Services Job Matching Example Job to Match: Senior Computer Systems Administrator

Discipline Code Function/Discipline

AIT IT Administration

AIT000 IT Administration Generalist/Multidiscipline

AIT010 Computer Systems Administration

AIT015 Web Site Administration

AIT020 Help Desk Support

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1. Review and identify Career Band2. Select appropriate Career Level3. Corresponding Global Grade

4. Select Function and Discipline

Job Code: AIT010-P3

Grade 7 8 9 10 11 12 13 14 15 16 17

Professional (P)

P1 P2 P3 P4 P5 P6

Only match to Career Levels in North America. No need to match to individual Global Grades.

1. Professional2. Career–P33. Global Grade 11–12

Professional (P)


Towers Watson Data Services Support Levels vs. Support Functions

Support LevelsTypical jobs— Technicians— Clerks— Assembly/Production workersCommon characteristics— Typically has vocational training, but no university degree— Understands basic skills in a hands-on environment

Support FunctionsDistinguish incumbents who work with professionals who have specific training— Lawyers— Engineers— Traders— Nuclear plant operatorsMany typically have professional education (i.e., university) and are matched to the Professional Career Band

● Vocational training is also called Career and Technical Education (CTE)

● Preparation for careers that are based in manual or practical activities

● Traditionally non-academic and totally related to a specific trade, occupation or vocation


Towers Watson Data Services Support Levels vs. Support Functions (continued)

Provides legal advice and services.Incumbents must have a law degree that qualifies them to practice as a lawyer

ALS – Legal Support(M, P and U levels)

ALG – Legal(M and P levels only)

Legal

Intellectual Property/Patent Law (ALG030)

PROFILE SAMPLE DISCIPLINESFUNCTION

Other Functions

AZE – Engineering

AZT – Technical Specialty/Skilled Trade

Paralegal (ALS010)

Contract Administrator (ALS020)

Provides support for a variety of law-related activities that do not require a law degree

EMT – Energy Trading

EMU– Energy Trading Operations/Support

NPO – Nuclear Plant Operations

NSA – Nuclear Plant Administrative Support Services

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Towers Watson Data Services Three Types of Technical Employees

● University engineering degree

● Works in research/product development or operations (production, operation, construction or maintenance)

● Analyzes, models and develops complex interactions among many components that comprise artificial systems

● Applicable Career Levels: P1 – P6

● University graduate but no engineering degree

● Not a licensed engineer

● Key elements of technical expertise are acquired on the job

● Sufficient experience to work on engineering type projects

● Applies a combination of technical and business knowledge to a wide spectrum of roles

● Applicable Career Levels: P1 – P5

● No university or engineering degree

● Operates with an understanding of basic technical skills typical in a hands-on environment

● Typically attends vocational training programs for specific technical skills and technologies

● Applicable Career Levels: T1 – T4

Qualified Engineer

Technical Professional

Technician

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DISCIPLINECAREER

BANDPROFILE

AMS020Customer

Contact Center

M Manager Call/Contact Center

P Rare

U 1st and 2nd level operators dealing with customer operational issues

Towers Watson Data Services Help Desk

NonTechnical

Technical

AIT020Help Desk Support

M Manager Technical Support Center

AMT000Technical

Customer Support –Remote/Help Desk

P 2nd level support dealing with technical problems in a call/contact center environment

T 1st level support dealing with technical problems in a call/contact center environment

ALL can be OUTSOURCED or INTERNAL

(Organization's) internal

External (customer)

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Towers Watson Data Services Interactive/Online Media

Marketing Staff Jobs

Internal

DISCIPLINE LEVEL PROFILE

AMK110E-Commerce Marketing M/P/T Markets the organization's products/

services through the Web

AMK120Web Content

Management/ProductionM/P/T Manages/produces content on the

organization’s Web sites for customers

AMK130Web Graphic/Visual Design M/P/T

Develops and maintains graphic design and layout of the organization’s Web sites for customers

AMK140Web Multimedia Production M/P/T

Designs a diverse mix of media (e.g., audio, video) for the organization’s Web sites for customers

AMK designs and produces content for

the organization’s web sites that AID builds and AIT administers

AIT015Website Administration M/P/T Maintains the technical aspects of the

organization’s own Web sites

AID015Internet/Web Application

DevelopmentM/P/T Designs and develops organization’s own

Intranet and Extranet applications

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Towers Watson Data Services Energy Services Disciplines in All Industry Functions (excludes AZE and AZT)

AAY500 Nuclear Power Plant Security

AAY510 Nuclear Security Trainer

ACA500 Economic Development

ACA510 ISO/RTO Market Participant Relations/Services/Resources

ACA520 ISO/RTO Market Participant Committee Support

ACA530 Renewable/Alternative Power Grid Access Regulatory and Market Affairs

AEM510 Bulk Power Market Strategy Design and Development

AEM520 Bulk Power Market Operations

AEM530 Bulk Power Market Monitoring and Compliance

AEM540 Renewable/Alternative Energy Market Intelligence

AEO510 Bulk Power Market Settlements

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Towers Watson Data Services Energy Services Disciplines in All Industry Functions (excludes AZE and AZT) (continued)

AID500 Energy Management System (EMS) Software Development

AID510 Energy Management System (EMS) Architecture

AID520 Nuclear Simulator Software

AMS500 Customer Billing Systems Planning and Analysis

AMS510 Meter Reading – Residential

AMS520 Meter Reading – Industrial

APM510 Major Construction Project Management

APM530 Electric Transmission and/or Distribution Project Management

APM540 Gas Transmission and/or Distribution Project Management

APM550 Fossil Power Generation Project Management

APM560 Hydroelectric Power Generation Project Management

APM570 Nuclear Power Generation Project Management

ARE500 Conduit Joint Use Agreement Coordinator

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Towers Watson Data ServicesUtility Industry Compensation Review and Emerging Issues


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Introduction

This briefing presents a review of utility industry executive compensation trends and key issues

We begin by looking back at 2010Pay level results based on data from approximately 62 US utility companiesInformation drawn from Towers Watson’s 2009 and 2010 CDB Energy Services Executive Compensation DatabaseExamined year-over-year changes, focusing on CEO pay as an indicator of broader executive compensation trends

We conclude by discussing 2011 compensation changes and the current environment for executive pay

Note that data trends are not meant to be prescriptive but are intended to provide an overview of market developments

In determining the right programs for your company, external data must be balanced with critical internal factors

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Looking Back2010 – The Year in Review

towerswatson.com 46© 2011 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.


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Year-over-Year Comparison of CEO Pay

Base salary saw a modest increase but annual bonus and long-term incentives rebounded from 2009 depressed levels due to the improvement of the economy

Utility’s long-term incentives were not as greatly impacted by the economic downturn in 2009 as compared to other industries

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Pay ElementMedian Percent Change

2009 to 2010

Base Salary 4%

Annual Bonus Paid 18%

Total Cash Compensation 29%

Long-term Incentives 14%

Total Direct Compensation 21%

Source: Towers Watson’s 2009 and 2010 CDB Energy Services Executive Compensation Database


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Average Mix of CEO Pay

The shift in mix is subtle but the heavier emphasis on long-term incentives is not unexpected given the economic recovery

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2010 Pay Mix2009 Pay Mix

Base Salary

Target Bonus

Long-term Incentives

Source: Towers Watson’s 2009 and 2010 CDB Energy Services Executive Compensation Database


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Long-term Incentive Prevalence and Plan Types

Performance plans continue to be the most widely used long-term incentive among utilities, followed by restricted stock and then stock options

Multiple LTI vehicles are still common Most prevalent combination is performance plans and restricted stock

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Long-Term Plan Type Prevalence

Source: Towers Watson’s 2010 Long-term Incentive Plan Report

Long-Term Plan Combinations


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Looking AheadA Crystal Ball into 2011



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Anticipated Changes in CEO Compensation in 2011

With the economy continuing to rebound since the downturn of 2008/2009, an internal survey of Towers Watson consultants was conducted to predict 2011 CEO compensation changes across all industries over 2010 levels

The table below outlines the anticipated changes for each element of compensation:

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Pay Element PredictionBase Salary More than half of the survey respondents feel that base salary will increase

by more than 3%

Target Bonus 2011 target bonuses are expected to remain flat or increase only modestly in relation to 2010 levels (85% of survey respondents)

Long-term Incentive Grant Values

LTI award growth will decelerate in 2011 with 49% of respondents believing LTI values will only increase between 4% and 9%

Total Direct Compensation

Single digit increases in Total Direct Compensation are expected with anticipated increases ranging from 4 – 6% (66% of survey respondents)


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Emerging Issues



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Emerging IssuesBased on anecdotal consulting experience the following emerging issues have been observed among utilities:Annual Incentives

Continued focus on financial performance and fiscal conservatism— Emphasis on the bottom line performance (EPS, income) — Some payout opportunities recalibrated to be more conservative (i.e., increased

rigor in goal setting process)

Financial performance focus can jeopardize rate recovery of incentives, given continued scrutiny of incentives in rate cases

Long-Term IncentivesContinued emphasis on TSR as a performance plan measure given increased pay-for-performance focus

Risk MitigationOngoing focus on compensation programs to ensure plans do not drive excessive risk taking behaviors— A key difficulty is ensuring pay plans do not encourage unnecessary risk while still

motivating executives 53


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Emerging Issues (continued)

Other IssuesStriking the balance between pay programs that are both aligned with performance and still able to retain key talentStruggling to balance the different “deals” between employees that are grandfathered into legacy programs and new executives who need to work toward the same set of goals

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Say When on Pay:What Are Companies Recommending?

In mid-December, Towers Watson conducted an online survey of 135 U.S. companies

51% of respondents indicated a preference for annual say-on-pay votes

Towers Watson also is monitoring proxy filings for the first companies holding annual meetings on or after January 21, 2011

As of February 28, 2011, 51% of Russell 3000 companies and 47% of Fortune 1000 companies recommended votes every three years

* Percentages may not add to 100% due to rounding errors.


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Say When on Pay:What Are Companies Recommending? (continued)

A triennial say on pay is most frequently recommended by companies so far, although we’re seeing an increase in the percentage of companies recommending annual say-on-pay votes


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Say When on Pay: What Are Companies Recommending? (continued)

The following list is a sample of companies recommending each specific vote frequency for future say-on-pay votes:

Company Recommendation No RecommendationAnnual Vote Biennial Vote Triennial Vote

Agilent TechnologiesApple

Applied MaterialsAtmos Energy

CarnivalDeere & Co.

EatonEli Lilly & Co.

Fortune BrandsHewlett-Packard

Marathon OilNavistar Int’l

OshkoshProgressiveStarbucks

SunTrust BanksTD Ameritrade Holdings

VisaWalt Disney Co.Weyerhaeuser

Brocade CommunicationsCanandaigua National

Fair Issac Corp.Hormel Foods

Rochester MedicalSchlumberger

Whole Foods Market

AccentureAECOM Technology

Air products & ChemicalsAlcoa

Analog DevicesAmerisourceBergen

AshlandCostco Wholesale

Discover Financial ServicesEmerson Electric

Jacobs EngineeringJohnson Controls

MonsantoQualcomm

Rockwell AutomationRockwell Collins

SCANAToll Brothers

ToroTyson Foods

Viacom

Becton, Dickinson & Co.

CoherentGreif, Inc.

J&J Snack FoodsJack-in-the-Box

Rock-TennUnited Technologies

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Say When on Pay:What Are Shareholders Approving?

Results for frequency proposals suggest companies recommending annual votes will receive broad support for those recommendations, while companies recommending triennial votes could face a split vote

Companies recommending biennial votes may likely face a situation where no particular frequency receives an overwhelming mandate from shareholders

None of the vote frequency options won majority support at two of the six companies recommending biennial votes


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Results of Early Say-on-Pay Votes

Results for 73 say-on-pay proposals are available so far. Most proposals have won support of 80% or more of the votes cast

Beazer Homes USA and Jacobs Engineering Group are the only two companies to fail to get majority support for their say-on-pay proposals to date

54% of shareholders at each company voted against the proposal

Institutional Shareholder Services (ISS) recommended votes against these proposals, citing a pay-for-performance disconnect at each company


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Managing Compensation through the Current Challenges

The struggle for balance in the increasingly public world of executive compensation is challenging

There will always be critics of executive compensation decisions

At a minimum, a company needs to pursue a thorough process before reaching a decision on major pay programs

Process must take into account critical internal and external factorsInternal factors: company strategy, talent needs, cultureExternal factors: market practice, stakeholder interests, governance groups, and the perceptions of an often skeptical outside world

This may mean the need for Longer lead times on executive pay decisions, Involving more stakeholders in the process,Reaching out to investor groups

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Towers Watson Data ServicesParticipation Process


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Towers Watson Data Servicestwdataservices.com – Home page

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Towers Watson Data Services View a list of products by region and/or industry

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Towers Watson Data Services View details of each survey, including key dates and prices

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Towers Watson Data Services Survey Selection Screen

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Towers Watson Data Services Participation – Sample Home Screen – General Industry – U.S.


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Towers Watson Data Services Participation – Register and Login


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Towers Watson Data Services Participation – Survey Home Page


Towers Watson Data Services Participation Survey Resources – Mapping Matrix

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Towers Watson Data Services Participation Survey Resources – Output Options

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Towers Watson Data Services Participation Survey Resources – Participant Guide

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Towers Watson Data Services Participate Online – 4 Easy Steps

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Towers Watson Data Services Participate Online – Step 1 – RSVP

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Towers Watson Data Services Participate Online – Step 2 – Order Your Results

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Towers Watson Data Services Participate Online – Step 3 – Download the Data Submission Workbook

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Towers Watson Data Services Participate Online – Step 4 – Submit Survey Data

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Towers Watson Data Services Participate Online – Step 4 – Upload File and Submit Survey

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Towers Watson Data Services Participate online – Submission Confirmation

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Towers Watson Data ServicesSurvey Results

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Towers Watson Data Services Survey Results Delivery

CompSource – Published Published – online access to pre-compiled dataOnline survey report view, download and printPresentation-ready resultsExport data in a variety of formats, create color graphs, presentation-ready PDFs and spreadsheet output for uploading to other systemsAge data

CompSource – AdvancedAdvanced – online access to self-service custom analysesAll Published option capabilities includedCreate custom peer groups by company name or characteristic (e.g., industry type, company size)Customize report layoutsCombine jobs and levelsCompare your organization’s data to the marketProduce year-to-year comparisonsRun single regression for one, many or all positions using revenue and other size measures for total sample or custom peer groups

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Results AvailableMeetingsWebcastQuestionnaire

Available

Mid-March March 3rd March 7th and 8th August

Data effective March 1st*

* or the most recent pay adjustment date for companies with April 1 or May 1 cycles

Towers Watson Data Services Energy Services Survey Timeline

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Towers Watson Data Services 2011 PricesCDB Energy Services U.S. (participants only)

Survey Published Advanced

Executive $4,600 $6,200Middle Management, Professional $3,000 $4,800and Support (MMPS)Energy Services Reports Package $6,500 $9,000(Executive and MMPS) ($1,100 savings) ($2,000 savings)

Added Value for Advanced SubscribersFree General Industry Executive N/A ($6,200 savings)Free General Industry MMPS N/A ($4,800 savings)

Reports Package Subscriber Savings Free results with participation:Board of Directors, Salary Budget, Workforce ($2,700 savings) ($2,700 savings) Efficiency, Compensation Policies and Practices, Perquisite Policies and PracticesReduced price of $700 for the Employee Benefits ($300 savings) ($300 savings) Practices Report ($1,000 value, no participation required)

Total potential savings ($4,100 total savings) ($14,000 total savings)NOTE: Multi-year, multi-country discounts available when purchased as part of a Global Data Agreement


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Questions and Comments

Client CarePhone: +1 800 645 [email protected]

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