UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No.     )

 

Filed by the Registrant [X]

 

Filed by a Party other than the Registrant [  ]

 

Check the appropriate box:

 

 

 

 

 

IDACORP, INC.

1221 West Idaho Street

Boise, Idaho 83702-5627

 

PART 1 – INFORMATION ABOUT THIS PROXY STATEMENT AND THE ANNUAL MEETING

 

General Information

 

This proxy statement contains information about the 2015 Annual Meeting of Shareholders (“Annual Meeting”) of IDACORP, Inc. (“IDACORP”). The Annual Meeting will be held on Thursday, May 21, 2015, at 10:00 a.m. local time at the IDACORP and Idaho Power Company corporate headquarters building, located at 1221 West Idaho Street in Boise, Idaho 83702-5627.

 

References in this proxy statement to the “company,” “we,” “us,” or “our” refer to IDACORP. We also refer to Idaho Power Company (“Idaho Power”) in this proxy statement. Idaho Power is an electric utility engaged in the generation, transmission, distribution, sale, and purchase of electric energy and is our principal operating subsidiary.

 

This proxy statement is being furnished in connection with the solicitation of proxies by the IDACORP Board of Directors for use at the Annual Meeting and any adjournment of the Annual Meeting. All returned proxies that are not revoked will be voted in accordance with your instructions.

 

You are entitled to attend the Annual Meeting only if you are an IDACORP shareholder as of the close of business on March 26, 2015, the record date, or hold a valid proxy for the meeting. In order to be admitted to the Annual Meeting, you must present proof of ownership of IDACORP common stock on the record date. This can be (a) a brokerage statement or letter from a bank or broker indicating ownership on the record date; (b) the Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”); (c) a printout of the proxy distribution email (if you received your materials electronically); (d) a proxy card; (e) a voting instruction form; or (f) a legal proxy provided by your broker, bank, or nominee. Any holder of a proxy from a shareholder must present the proxy card, properly executed, and a copy of the proof of ownership. Shareholders and proxy holders must also present a form of photo identification such as a driver’s license. Finally, shareholders interested in attending in person must make a reservation by calling (800) 635-5406 prior to the close of business on May 20, 2015. We may not admit anyone who does not satisfy these requirements or who refuses to comply with our security procedures. 

 

We make our proxy materials and our annual report to shareholders available on the Internet as our primary distribution method. Most shareholders will only be mailed a Notice of Internet Availability. We expect to mail the Notice of Internet Availability on or about April 3, 2015. The Notice of Internet Availability specifies how to access proxy materials on the Internet, how to submit your proxy vote, and how to request a hard copy of the proxy materials. On or about April 3, 2015, we also began mailing printed copies of our proxy materials to our shareholders who had previously requested paper copies of our proxy materials.

 

Note About Forward-Looking Statements: Statements in this proxy statement that relate to future plans, objectives, expectations, performance, events, and the like, including statements regarding future financial and operational performance (whether associated with compensation arrangements or otherwise), may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Forward-looking statements may be identified by words including, but not limited to, “anticipates,” “believes,” “intends,” “estimates,” “expects,” “targets” “should,” and similar expressions. Shareholders are cautioned that any such forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those projected in the forward-looking statements. We assume no obligation to update any such forward-looking statement, except as required by applicable law. Shareholders should review the risks and uncertainties listed in our most recent Annual Report on Form 10-K and other reports we file with the Securities and Exchange Commission, including the risks described therein, which contain factors that may cause results to differ materially from those contained in any forward-looking statement.

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Questions and Answers About the Annual Meeting, this Proxy Statement, and Voting

 

Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

 

Pursuant to rules adopted by the Securities and Exchange Commission, we have elected to provide access to our proxy materials on the Internet. Accordingly, we are sending the Notice of Internet Availability to most of our shareholders. All shareholders will have the ability to access the proxy materials on a website referred to in the Notice of Internet Availability or may request a printed set of the proxy materials at no charge. Shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis by following the instructions provided in the Notice of Internet Availability.

 

Who is entitled to vote at the Annual Meeting?

 

You are entitled to notice of, and to vote at, the Annual Meeting if you owned shares of our common stock at the close of business on March 26, 2015. This is referred to as the “record date.” As of the record date, we had 50,347,913 outstanding shares of common stock entitled to one vote per share on all matters.

 

What matters are before the Annual Meeting, and how does the IDACORP Board of Directors recommend I vote?

 

At the Annual Meeting, our shareholders will consider and vote on the matters listed below. In determining how to vote, please consider the detailed information regarding each proposal as discussed in this proxy statement.

 

Proposal Number	Description of Proposal	Board Recommendation	Page Reference
1	Elect to the board of directors the ten nominees who are named in this proxy statement to serve until the 2016 annual meeting of shareholders, and until their successors are elected and qualified	FOR each director nominee	14
2	Advisory resolution to approve our executive compensation	FOR	62
3	Re-approval of the IDACORP 2000 Long-Term Incentive and Compensation Plan for purposes of Internal Revenue Code Section 162(m)	FOR	63
4	Re-approval of the IDACORP Executive Incentive Plan for purposes of Internal Revenue Code Section 162(m)	FOR	70
5	Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2015	FOR	74

 

Will any other business be conducted at the Annual Meeting or will other matters be voted on? 

 

As of the date of this proxy statement, we are unaware of any matters, other than those set forth in the Notice of 2015 Annual Meeting of Shareholders, that may properly be presented at the Annual Meeting. If any other matters are properly presented for consideration at the meeting, including, among other things, consideration of a motion to adjourn the meeting to another time or place, the persons named as proxies, or their duly constituted substitutes, will be deemed authorized to vote those shares for which proxies have been given or otherwise act on such matters in accordance with their judgment.

 

What is the difference between holding shares as a shareholder of record and as a beneficial owner?

 

If your shares are registered directly in your name with our transfer agent, Wells Fargo Bank Shareowner Services, you are considered the “shareholder of record” with respect to those shares. If your shares are held by a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of the shares, and those shares are referred to as being held in “street name.” As the beneficial owner of those shares, you have the right to direct your broker, bank, or nominee how to vote your shares, and you should receive separate instructions from your broker, bank, or other holder of record describing how to vote your shares. You also are invited to attend the Annual Meeting in person. However, because a beneficial owner is not the shareholder of

 

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record, you may not vote these shares in person at the Annual Meeting unless you obtain a “legal proxy” from the broker, bank, or nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting.

 

How can I vote my shares before the Annual Meeting?

 

If you hold shares in your own name as a shareholder of record, you may vote before the Annual Meeting by following the instructions contained in the Notice of Internet Availability. Under Idaho law, proxies granted according to those instructions will be valid. If you request printed copies of the proxy materials by mail, you may also cast your vote by completing, signing, and dating the proxy card provided to you and returning it in the enclosed postage-paid envelope, which will authorize the individuals named on the proxy card to serve as your proxy to vote your shares at the Annual Meeting in the manner you indicate.

 

If you are a beneficial owner of shares held in street name, your broker, bank, or other nominee should provide you with materials and instructions for voting your shares. Please check with your broker or bank and follow the voting procedures your broker or bank provides to vote your shares.

 

Submitting a proxy or voting through the telephone or the Internet will not affect your right to attend the Annual Meeting.

 

If I am the beneficial owner of shares held in street name by my bank or broker, how will my shares be voted?

 

If you complete and return the voting instruction form provided to you by your bank or broker, we expect that your shares will be voted in accordance with your instructions. If you do not provide voting instructions, brokerage firms only have authority under applicable New York Stock Exchange rules to vote shares on discretionary matters. The ratification of Deloitte & Touche LLP as our independent registered public accounting firm for 2015 is the only matter included in the proxy statement that is considered a discretionary matter. When a proposal is not discretionary and the brokerage firm has not received voting instructions from its customers, the brokerage firm cannot vote the shares on that proposal. Those shares are considered “broker non-votes.” Please promptly follow the instructions you receive from your bank or broker so your vote can be counted.

 

If I am a shareholder of record, how will my shares be voted?

 

All proxies will be voted in accordance with the instructions you submitted via the Internet, by toll-free telephone, or, if you requested printed proxy materials, by completing, signing, and returning the proxy card provided to you. If you completed and submitted your proxy (and do not revoke it) prior to the Annual Meeting, but do not specify how your shares should be voted, the shares of IDACORP common stock represented by the proxy will be voted in accordance with the recommendation of our board of directors.

 

Can I vote in person at the Annual Meeting?

 

Yes. If you hold shares in your own name as a shareholder of record, you may attend the Annual Meeting and cast your vote at the meeting by properly completing and submitting a ballot. If you are the beneficial owner of shares held in street name, you must first obtain a legal proxy from your broker, bank, or other nominee giving you the right to vote those shares and submit that proxy along with a properly completed ballot at the meeting. Shareholders interested in attending in person must make a reservation by calling (800) 635-5406 prior to the close of business on May 20, 2015.

 

What do I need to bring to be admitted to the Annual Meeting?

 

In order to be admitted to the Annual Meeting, you must present proof of ownership of IDACORP common stock on March 26, 2015, the record date. This can be (a) a brokerage statement or letter from a bank or broker indicating ownership on the record date; (b) the Notice of Internet Availability; (c) a printout of the proxy distribution email (if you received your materials electronically); (d) a proxy card; (e) a voting instruction form; or (f) a legal proxy provided by your broker, bank, or nominee. If a shareholder desires to vote its shares held in street name in person at the meeting, the shareholder must obtain a legal proxy in the shareholder’s name from the broker, bank, or other nominee who holds those shares in street name. Any holder of a proxy from a shareholder must present the proxy card, properly executed, and a copy of the proof of ownership. Shareholders and proxy holders must also present a form of photo identification such as a driver’s license. Shareholders interested in attending in person must make a reservation by calling (800) 635-5406 prior to the close of business on May 20, 2015. We may not admit anyone who does not present the foregoing, fails to make a reservation, or refuses to comply with our security procedures.

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Are shareholders who listen to the Annual Meeting through the live audio webcast deemed present at the Annual Meeting?

 

Shareholders accessing the Annual Meeting through the live audio webcast will not be considered present at the Annual Meeting and will not be able to vote through the webcast or ask questions.

 

May I change or revoke my proxy?

 

You may change or revoke your proxy before it is voted at the Annual Meeting by (1) granting a subsequent proxy through the Internet or by telephone, or (2) delivering to us a signed proxy card with a date later than your previously delivered proxy. If you attend the meeting and wish to vote in person, you may revoke your proxy by oral notice at that time. You may also revoke your proxy by mailing your written revocation to IDACORP’s corporate secretary at 1221 West Idaho Street, Boise, Idaho 83702-5627. We must receive your written revocation before the Annual Meeting for it to be effective.

 

What is the “quorum” for the Annual Meeting and what happens if a quorum is not present?

 

The presence at the Annual Meeting, in person or by proxy, of a majority of the shares issued and outstanding and entitled to vote as of March 26, 2015 is required to constitute a “quorum.” The existence of a quorum is necessary in order to take action on the matters scheduled for a vote at the Annual Meeting. If you vote by Internet or telephone, or submit a properly executed proxy card, your shares will be included for purposes of determining the existence of a quorum. Proxies marked “abstain” and “broker non-votes” also will be counted in determining the presence of a quorum. If the shares present in person or represented by proxy at the Annual Meeting are not sufficient to constitute a quorum, the chairman of the meeting or the shareholders may, by a vote of the holders of a majority of votes present in person or represented by proxy, without further notice to any shareholder (unless a new record date is set), adjourn the meeting to a different time and place to permit further solicitations of proxies sufficient to constitute a quorum.

 

What is an “abstention”?

 

An “abstention” occurs when a shareholder sends in a proxy with explicit instructions to decline to vote regarding a particular matter. An abstention with respect to a matter submitted to a vote will not be counted for or against the matter. Consequently, an abstention with respect to any of the proposals to be presented at the Annual Meeting will not affect the outcome of the vote.

 

What is a “broker non-vote”?

 

A broker non-vote occurs when a broker or other nominee who holds shares for another person does not vote on a particular proposal because that holder does not have discretionary voting power for the proposal and has not received voting instructions from the beneficial owner of the shares. If no voting instructions have been provided by the beneficial owner, brokers will have discretionary voting power to vote shares with respect to the ratification of the appointment of the independent registered public accounting firm, but not with respect to any of the other proposals. A broker non-vote will have the same effect as an abstention and, therefore, will not affect the outcome of the vote.

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What vote is required to approve each proposal?

 

The following votes are required for approval of each proposal at the Annual Meeting:

 

Proposal Number	Vote Requirement	Effect of Withholding, Abstentions and Broker Non-Votes
1	Our directors are elected by a plurality of the votes cast by the shares entitled to vote in the election of directors.	Not voted, though a “withhold” vote is relevant under our director resignation policy
2	The advisory resolution on executive compensation is approved if the votes cast in favor exceed the votes cast against the resolution.	Not voted
3	The proposal for re-approval of the IDACORP 2000 Long-Term Incentive and Compensation Plan for purposes of Internal Revenue Code Section 162(m) is approved if the votes cast in favor exceed the votes cast against the proposal	Not voted
4	The proposal for re-approval of the IDACORP Executive Incentive Plan for purposes of Internal Revenue Code Section 162(m) is approved if the votes cast in favor exceed the votes cast against the proposal	Not voted
5	The ratification of the appointment of Deloitte & Touche LLP is approved if the votes cast in favor exceed the votes cast against ratification.	Abstentions are not voted; uninstructed shares are subject to a discretionary vote

 

What happens if, under Proposal No. 1, a director receives a greater number of votes “withheld” than votes “for” such director? 

 

As noted above, a plurality of votes cast by shareholders present, in person or by proxy, at the Annual Meeting is required for the election of our directors. “Plurality” means that the nominees receiving the largest number of votes cast are elected for the number of director positions that are to be filled at the meeting. However, under our director resignation policy, if a director nominee in an uncontested election receives a greater number of votes “withheld” from his or her election than votes “for” such election, the director must promptly tender a resignation to the board of directors. The board of directors will then decide whether to accept the resignation within 90 days following certification of the shareholder vote (based on the recommendation of the corporate governance and nominating committee, which is comprised exclusively of independent directors). We will publicly disclose the board of directors’ decision and its reasoning with regard to the offered resignation.

 

Who will count the votes?

 

An independent tabulator will tabulate the votes cast by mail, Internet, or telephone. Our corporate secretary will tabulate any votes cast at the Annual Meeting and will act as inspector of election to certify the results.

 

Where can I find the voting results?

 

We expect to report the voting results on a Current Report on Form 8-K filed with the Securities and Exchange Commission within four business days following the Annual Meeting.

 

Are the votes of specific shareholders confidential?

 

It is our policy that all proxies for the Annual Meeting that identify shareholders, including employees, are to be kept confidential from the public. Proxies will be forwarded to the independent tabulator who receives, inspects, and tabulates the proxies. We do not intend to disclose the voting decisions of any shareholder to any third party except (a) as required by law or order or directive of a court or governmental agency, (b) to allow the independent election inspectors to review and certify the results of the shareholder vote, (c) in the event of a dispute as to the vote or voting results, or (d) in the event of a matter of significance where there is a proxy solicitation in opposition to the board of directors, based on an opposition proxy statement filed with the Securities and Exchange Commission.

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Who will pay the cost of this solicitation and how will these proxies be solicited?

 

We will pay the cost of soliciting your proxy. Our officers and employees may solicit proxies, personally or by telephone, fax, mail, or other electronic means, without extra compensation. In addition, D.F. King & Co., Inc. will solicit proxies from brokers, banks, nominees, and institutional investors or other shareholders at a cost of approximately $6,500 plus out-of-pocket expenses. We will reimburse banks, brokerage firms, and other custodians, nominees, and fiduciaries for their expenses in providing our proxy materials to beneficial owners.

 

What if I have further questions not addressed in this proxy statement?

 

If you have any questions about voting your shares or attending the Annual Meeting, please call our Shareowner Services Department at (800) 635-5406.

 

PART 2 – CORPORATE GOVERNANCE AT IDACORP

Director Independence and Executive Sessions

 

Our board of directors has adopted a policy, contained in our Corporate Governance Guidelines (available at www.idacorpinc.com/corpgov/default.cfm), that the board of directors will be composed of a majority of independent directors. The board of directors reviews annually the relationships that each director has with the company (either directly or as a partner, shareholder, or officer of an organization that has a relationship with the company). Following the annual review, only those directors who the board of directors affirmatively determines have no material relationship with the company and can exercise independent judgment will be considered independent directors, subject to additional qualifications prescribed under the listing standards of the New York Stock Exchange and under applicable laws.

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All members of our board of directors are non-employees, except for Darrel T. Anderson, who is our president and chief executive officer (“CEO”). The board of directors has determined that all members of our board of directors, other than J. LaMont Keen, who retired as our president and CEO in April 2014, and Mr. Anderson, are independent based on all relevant facts and circumstances and under the New York Stock Exchange listing standards and our Corporate Governance Guidelines.

 

Our non-employee directors meet in executive session at each regular meeting of the board of directors. Additionally, our independent directors meet separately in executive session periodically, and not less frequently than annually. The independent chairman of the board of directors presides at board meetings and at regularly scheduled executive sessions of independent and non-management directors.

 

Codes of Business Conduct

 

We have a Code of Business Conduct that applies to all of our officers and employees. We also have a separate Code of Business Conduct and Ethics for directors. These are posted on our website at www.idacorpinc.com/corpgov/conduct_ethics.cfm. We will also post on our website any amendments to, or waivers of, our Codes of Business Conduct, as required by Securities and Exchange Commission rules or New York Stock Exchange listing standards, at www.idacorpinc.com/corpgov/conduct_ethics.cfm.

 

Board Leadership Structure

 

The board of directors separated the positions of chairman of the board of directors and CEO in 1999. Our CEO is responsible for leadership, overall management of our business strategy, and day-to-day operations, while our chairman presides over meetings of our board of directors and provides guidance to our CEO regarding policies and procedures approved by our board of directors. Separating these two positions allows our CEO to focus on our day-to-day business and operations, while allowing the chairman of the board of directors to lead the board of directors in its fundamental role of providing advice to, and independent oversight of, management. The board of directors recognizes the time, effort, and energy that the CEO is required to devote to his position, as well as the increasing commitment required of the chairman position, particularly as the board of directors’ oversight responsibilities continue to grow.

 

While our bylaws and Corporate Governance Guidelines do not mandate that our chairman and CEO positions be separate, the board of directors believes for the reasons outlined above that having separate positions and having an independent director serve as chairman is the appropriate leadership structure for the company at this time and demonstrates our commitment to good corporate governance. The board of directors believes that this issue is part of the succession planning process and that it is in the best interests of the company for the board of directors to make a determination as to the advisability of continuing to have separate positions when it elects a new CEO.

 

The Board of Directors’ Role in Risk Oversight

 

Our management team is responsible for the day-to-day management of risks the company faces. We have appointed a chief risk officer, who is responsible for overseeing and coordinating risk assessment processes and mitigation efforts on an enterprise wide basis. The chief risk officer administers processes intended to identify key business risks, assists in appropriately assessing and managing these risks within stated limits, enforces policies and procedures designed to mitigate risk, and reports on these items to senior management and the board of directors. The chief risk officer reports regularly to the board of directors and appropriate board committees regarding risks the company faces and how it is managing those risks.

 

While the chief risk officer and other members of our senior leadership team are responsible for the day-to-day management of risk, our board of directors is responsible for ensuring that an appropriate culture of risk management exists within our company, for setting the right “tone at the top,” and assisting management in addressing specific risks that our company faces. The board of directors has the responsibility to oversee the risk management processes designed and implemented by management and confirm the processes are adequate and functioning as designed.

 

While the full board of directors is ultimately responsible for high-level risk oversight at our company, it is assisted by the executive committee, the audit committee, the compensation committee, and the corporate governance and nominating committee in fulfilling its oversight responsibilities in certain areas of risk. The executive committee assists the board of directors in fulfilling its oversight responsibilities with respect to the company’s risk management process generally. The audit committee assists the board of directors in fulfilling its oversight responsibilities with respect to major financial risk exposures and our energy risk management

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practices (including hedging transactions and collateral requirements) and, in accordance with the listing standards of the New York Stock Exchange, discusses policies with respect to risk assessment and risk management. Representatives from our independent registered public accounting firm attend audit committee meetings, regularly make presentations to the audit committee, comment on management presentations, and engage in private sessions with the audit committee, without members of management present, to raise any concerns they may have with our risk management practices. The compensation committee assists the board of directors in fulfilling its oversight responsibilities with respect to risks arising from our compensation policies and practices. The corporate governance and nominating committee undertakes periodic reviews of processes for management of risks associated with our company’s organizational structure, governing instruments, and policies. In fulfilling their respective responsibilities, the committees meet regularly with our officers and members of senior management, as well as our internal and external auditors. Each committee has full access to management, as well as the ability to engage and compensate its own independent advisors.

 

The board of directors receives reports from the executive committee, audit committee, compensation committee, and corporate governance and nominating committee relating to the oversight of risks in their areas of responsibility. Based on this and information regularly provided by management, the board of directors evaluates our risk management processes and considers whether any changes should be made to those processes or the board of directors’ risk oversight function. We believe that this division of risk oversight ensures that oversight of each type of risk the company faces is allocated, at least initially, to the particular directors most qualified to oversee it. It also promotes board efficiency because the committees are able to select the most timely or important risk-related issues for the full board of directors to consider.

 

We believe that one of the risks our company faces is related to our expectation that a significant number of long-term employees will be retiring from our company in the coming years. As a result, our board of directors is actively involved in monitoring our succession planning. The board of directors reviews the succession plans developed by members of senior management at least annually, with a focus on ensuring a talent pipeline at the senior officer level and for specific critical roles. We seek to ensure that our directors are exposed to a variety of members of our leadership team, and not just the senior-most officers, on a regular basis, through formal presentations and informal events. Our board of directors is also informed of general workforce trends, expected retirement levels or turnover, and recruiting and development programs, of particular importance given Idaho Power’s specialized workforce and anticipated near-term rate of employee retirements.

 

Board Meetings and Director Attendance

 

The members of our board of directors are expected to attend board meetings and meetings of board committees on which they serve, and to spend the time needed and to meet as frequently as necessary to properly discharge their responsibilities. The board of directors held six meetings in 2014. Our directors had a 100 percent attendance rate at those meetings. Our directors also attended 100 percent of the meetings of the committees in 2014 on which he or she was a member in 2014. Our Corporate Governance Guidelines provide that all directors are expected to attend our annual meeting of shareholders and be available, when requested by the chairman of the board of directors, to answer any questions shareholders may have. All then-serving members of the board of directors attended our 2014 annual meeting of shareholders.

 

Board Committee Charters

 

Our standing committees of the board of directors are the executive committee, the audit committee, the compensation committee, and the corporate governance and nominating committee. We have:

 

●	charters for the audit committee, compensation committee, and corporate governance and nominating committee; and

●	Corporate Governance Guidelines, which address issues including the responsibilities, qualifications, and compensation of the board of directors, as well as board leadership, board committees, director resignation, and self-evaluation.

 

Our committee charters and our Corporate Governance Guidelines may be accessed on our website at www.idacorpinc.com/corpgov/default.cfm. Information on our committees of the board of directors is set forth in “Part 3 – Board of Directors – Committees of the Board of Directors.”

 

Board Membership Criteria and Consideration of Diversity

 

We believe that directors should possess the highest personal and professional ethics, integrity, and values and be committed to representing the long-term interests of our shareholders. Directors must also have an inquisitive and objective perspective, practical wisdom, and mature judgment. Although the corporate governance and nominating committee and the board of directors do not have

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a formal policy for considering diversity in identifying director nominees, we endeavor to have a board representing diverse experience at policy-making levels in business, finance, and accounting and in areas that are relevant to our business activities. We believe our current directors bring a strong diversity of experiences to the board of directors as leaders in business, finance, accounting, regulation, and the utility industry.

 

Under the oversight of the corporate governance and nominating committee, the board of directors conducts an annual self-evaluation of its performance and utilizes the results to assess and determine the characteristics and critical skills required of directors. Each of our audit, compensation, and corporate governance and nominating committees also perform an annual self-assessment. In addition, our Corporate Governance Guidelines and the corporate governance and nominating committee charter provide that the corporate governance and nominating committee will annually review board committee assignments and consider the rotation of the chairman and members of the committees with a view toward balancing the benefits derived from continuity against the benefits derived from the diversity of experience and viewpoints of the various directors.

 

At least one member of our audit committee must be an “audit committee financial expert.” Directors are automatically retired immediately prior to the first annual meeting of shareholders after they reach age 72. A majority of board members must be independent under our Corporate Governance Guidelines and applicable New York Stock Exchange listing standards.

 

Director Resignation Policy

 

In 2012, our board of directors adopted a policy that provides that if any director nominee in an uncontested election receives a greater number of votes “withheld” from his or her election than votes “for” such election, the director nominee must tender his or her resignation to the board of directors promptly after the voting results are certified. The corporate governance and nominating committee, comprised entirely of independent directors and which will specifically exclude any director who is required to tender his or her own resignation, will consider the tendered resignation and make a recommendation to the board of directors, taking into account all factors deemed relevant. These factors include, without limitation, the underlying reasons why shareholders withheld votes from the director (if ascertainable) and whether the underlying reasons are curable, the length of service and qualifications of the director whose resignation has been tendered, the director’s contributions to our company, whether by accepting the resignation we will no longer be in compliance with any applicable law, rule, regulation, or governing document, and whether or not accepting the resignation is in the best interests of our company and our shareholders. Our board of directors will act upon the corporate governance and nominating committee’s recommendation within 90 days following certification of the shareholder vote and will consider the factors considered by the corporate governance and nominating committee and any additional information and factors as the board of directors believes to be relevant. We will publicly disclose the board of directors’ decision and rationale with regard to any resignation offered under the director resignation policy.

 

Process for Determining Director Nominees

 

In determining the composition of our board of directors, we seek a balanced mix of local experience, which we believe is specifically relevant for a utility, and national or public company experience, among other factors of experience. As a utility company with operations predominantly in Idaho and Oregon, we believe it is important for our company and our local directors to be involved in and otherwise support local community and charitable organizations.

 

Our corporate governance and nominating committee is responsible for selecting and recommending to the board of directors candidates for election as directors. Our Corporate Governance Guidelines contain procedures for the committee to identify and evaluate new director nominees, including candidates our shareholders recommend in compliance with our Corporate Governance Guidelines. The corporate governance and nominating committee begins the process of identifying and evaluating potential nominees for director positions and keeps the full board of directors informed of the nominating process. The corporate governance and nominating committee reviews candidates recommended by shareholders and may hire a search firm to identify other candidates.

 

The corporate governance and nominating committee gathers additional information on the candidates to determine if they qualify to be members of our board of directors. The corporate governance and nominating committee examines whether the candidates are independent, whether their election would violate any federal or state laws, rules, or regulations that apply to us, and whether they meet all requirements under our Corporate Governance Guidelines, committee charters, bylaws, codes of business conduct and ethics, and any other applicable corporate document or policy. The corporate governance and nominating committee also considers whether the nominees will have potential conflicts of interest, and whether they will represent a single or special interest, before finalizing a list of candidates for the full board of directors to consider for nomination.

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Process for Shareholders to Recommend Candidates for Director

 

Our Corporate Governance Guidelines set forth the requirements that you must follow if you wish to recommend director candidates to our corporate governance and nominating committee. If you recommend a candidate for director, you must provide the following information:

 

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the candidate’s name, age, business address, residence address, telephone number, principal occupation, the class and number of shares of our voting stock the candidate owns beneficially and of record, a statement as to how long the candidate has held such stock, a description of the candidate’s qualifications to be a director, whether the candidate would be an independent director, and any other information you deem relevant with respect to the recommendation; and

●	your name and address as they appear on our stock records, the class and number of shares of voting stock you own beneficially and of record, and a statement as to how long you have held the stock.

 

Recommendations must be sent to our corporate secretary at the address provided below. Our corporate secretary will review all written recommendations and send those conforming to the requirements described above to the corporate governance and nominating committee for review and consideration. The corporate governance and nominating committee evaluates the qualifications of candidates properly submitted by shareholders in the same manner as it evaluates the qualifications of director candidates identified by the committee or the board of directors.

 

Shareholders who wish to nominate persons for election to the board of directors, rather than recommend candidates for consideration, must follow the procedures set forth in our bylaws. Copies of our bylaws may be obtained by writing to our corporate secretary at IDACORP, Inc., 1221 West Idaho Street, Boise, Idaho 83702-5627, or by calling our corporate secretary at (208) 388-2200. See also the section entitled 2016 Annual Meeting of Shareholders in Part 7 - “Other Matters” in this proxy statement.

 

Communications with the Board of Directors and Audit Committee

 

Shareholders and other interested parties may communicate with members of the board of directors by:

 

●	calling (866) 384-4277 if they have a concern to bring to the attention of the board of directors, our chairman of the board of directors, or our non-employee directors as a group; or

●	logging on to www.ethicspoint.com and following the instructions to file a report if the concern is of an ethical nature.

 

Our general counsel receives all such communications and forwards them to the chairman of the board of directors. If your report concerns questionable accounting practices, internal accounting controls, or auditing matters, our general counsel will also forward your report to the chairman of the audit committee.

 

The acceptance and forwarding of communication to any director does not imply that the director owes or assumes any fiduciary duty to the person submitting the communication, all such duties being only as prescribed by applicable law.

 

Environmental and Sustainability Initiatives

 

Our board of directors is responsible for the oversight of our sustainability initiatives and is regularly informed of the goals, measures, and results of our sustainability programs. We publicly released our inaugural sustainability report in May 2012, and we expect to release our fourth annual sustainability report in May 2015. In connection with our sustainability initiatives, we have implemented steps that recognize the importance of environmental, social, and governance issues and policies, as discussed in those reports. We generally publish the most current sustainability report on Idaho Power’s website, www.idahopower.com. The sustainability reports and related website content are not incorporated by reference into this proxy statement.

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Certain Relationships and Related Transactions

 

Our related person transactions policy defines a related person transaction as one in which the amount exceeds $120,000 and excludes:

 

●	transactions available to all employees generally;

●	the purchase or sale of electric energy at rates fixed in conformity with law or governmental authority;

●	transactions involving compensation, employment agreements, or special supplemental benefits for directors or officers that are reviewed and approved by the compensation committee; and

●	transactions between or among companies within the IDACORP family.

 

The related person transactions policy defines a “related person” as any:

 

●	officer, director, or director nominee of IDACORP or any subsidiary;

●	person known to be a greater than 5% beneficial owner of IDACORP voting securities;

●	immediate family member of the foregoing persons, or person (other than a tenant or employee) sharing the household of the foregoing persons; or

●	firm, corporation, or other entity in which any person named above is a partner, principal, executive officer, or greater than 5% beneficial owner, or where such person otherwise has a direct or indirect material interest.

 

The corporate governance and nominating committee administers the policy, which includes procedures to review related person transactions, approve or disapprove related person transactions, and ratify unapproved transactions. The policy, which is in writing, also specifically requires prior corporate governance and nominating committee approval of proposed charitable contributions or pledges of charitable contributions in excess of $120,000 in any calendar year to a charitable or not-for-profit organization identified as a related person, except those nondiscretionary contributions made pursuant to our matching contribution program. The board of directors may approve a proposed related person transaction after reviewing the information considered by the corporate governance committee and any additional information it deems necessary or desirable:

 

●	if it determines in good faith that the transaction is in, or is not inconsistent with, the best interests of our company and the shareholders; and

●	if the transaction is on terms comparable to those that could be obtained in an arm’s-length dealing with an unrelated third party.

 

Steven R. Keen, our and Idaho Power’s senior vice president, chief financial officer (“CFO”), and treasurer, is the brother of J. LaMont Keen, a member of our board of directors. Mr. Steve Keen is one of our named executive officers, and thus his compensation for 2014 is described in Part 4 – “Executive Compensation” in this proxy statement. The corporate governance and nominating committee reviewed and approved the related person transaction, and the compensation committee and board of directors reviewed and approved all elements of Mr. Steven Keen’s 2014 compensation.

 

Matt Smith, the spouse of our vice president and chief risk officer, Lori Smith, is an employee of Idaho Power. Jamie Harrington, the brother of our corporate secretary, Patrick Harrington, is also an employee of Idaho Power. Mr. Smith and Mr. Jamie Harrington each received combined base salary and incentive compensation (inclusive of incentive compensation) from Idaho Power in excess of $120,000 during 2014, but in each case less than $155,000. Neither Mr. Smith nor Mr. Jamie Harrington are officers of the company, and their base salaries and incentive compensation are consistent with that paid to Idaho Power employees in similar roles. While the corporate governance committee did not specifically review the base salary and incentive compensation payable to Mr. Smith and Mr. Jamie Harrington for 2014, the compensation committee and full board of directors approved the design and metrics of the incentive programs in which they participated for 2014. At its February 2015 meeting, the corporate governance and nominating committee reviewed and approved the related person transactions for Mr. Smith and Mr. Jamie Harrington for 2015, and reviewed and ratified the related person transactions with these individuals for 2014.

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Security Ownership of Directors, Executive Officers, and Five-Percent Shareholders

 

The table that follows sets forth the number of shares of our common stock beneficially owned on March 13, 2015, by our directors and nominees, by our named executive officers listed in the 2014 Summary Compensation Table included in Part 4 – “Executive Compensation” of this proxy statement, and by our directors and executive officers as a group. Under U.S. Securities and Exchange Commission rules, “beneficial ownership” for purposes of this table takes into account shares as to which the individual has or shares voting and/or investment power as well as shares that may be acquired within 60 days (such as by exercising vested stock options). The beneficial owners listed have sole voting and investment power with respect to shares beneficially owned, including shares they own through the Idaho Power Company Employee Savings Plan and our Dividend Reinvestment and Stock Purchase Plan, except as to the interests of spouses or as otherwise indicated.

 

The table below sets forth information with respect to each person known to us to be the beneficial owner of more than five percent of our outstanding common stock as of March 13, 2015.

1

Based on a Schedule 13G/A filed on January 9, 2015, by BlackRock, Inc. BlackRock, Inc. reported sole voting power as to 7,069,295 shares and sole dispositive power as to 7,196,059 shares as the parent holding company or control person of BlackRock Advisors (UK) Limited; BlackRock Advisors, LLC; BlackRock Asset Management Canada Limited; BlackRock Asset Management Deutschland AG; BlackRock Asset Management Ireland Limited; BlackRock Fund Advisors; BlackRock Institutional Trust Company, N.A.; BlackRock International Limited; BlackRock Investment Management (Australia) Limited; BlackRock Investment Management (UK) Ltd; BlackRock Investment Management, LLC, BlackRock Life Limited.

2

Based on a Schedule 13G/A filed on January 29, 2015, by First Eagle Investment Management, LLC. First Eagle Investment Management, LLC reported sole voting power as to 4,306,565 shares and sole dispositive power as to 4,410,547 shares. The First Eagle Global Fund, a registered investment company for which First Eagle Investment Management, LLC acts as investment advisor, may be deemed to beneficially own 3,760,485 of such shares.

3	Based on a Schedule 13G filed on February 13, 2015, by FMR LLC. FMR LLC reported sole voting power as to 399 shares and sole dispositive power as to 3,615,647 shares.

4

Based on a Schedule 13G/A filed on February 10, 2015, by The Vanguard Group, Inc. The Vanguard Group, Inc. reported sole voting power as to 74,506 shares, sole dispositive power as to 3,234,351 shares, and shared dispositive power as to 66,506 shares. Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 66,506 shares as a result of its serving as the investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 8,000 shares as a result of its serving as investment manager of Australian investment offerings.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who beneficially own more than 10 percent of our common stock, to file reports of beneficial ownership and changes in beneficial ownership with the Securities and Exchange Commission. Our directors, executive officers, and holders of more than ten percent of our outstanding common stock are required by Securities and Exchange Commission rules to furnish us with copies of all Section 16(a) reports that they file. We file Section 16(a) reports on behalf of our directors and executive officers to report their initial and subsequent changes in beneficial ownership of our common stock. To our knowledge, based solely on a review of the reports we filed on behalf of our directors and executive officers and written representations from these persons that no other reports were required and all reports were provided to us, all Section 16(a) filing requirements applicable to our directors and executive officers were complied with for 2014.

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Three members of our board of directors, Mr. Jan B. Packwood, Ms. Joan H. Smith, and Mr. Thomas J. Wilford, will retire from the board of directors effective immediately prior to the Annual Meeting, as they will have reached our mandatory retirement age of 72. Upon Mr. Packwood’s, Ms. Smith’s, and Mr. Wilford’s retirement, the board of directors will consist of 10 members.

Prior to May 2012, our articles of incorporation, as amended (which we refer to as the “articles of incorporation” in this proxy statement), provided that directors are elected for three-year terms, with approximately one-third of the board of directors elected at each annual meeting of shareholders. Effective May 2012, we amended our articles of incorporation, following a shareholder vote, to provide that the company’s classified (three-year, staggered term) board structure would be phased out, and the annual election of the entire board of directors for a one-year term would be phased in over a three-year period commencing at the 2013 annual meeting of shareholders and concluding at the 2015 Annual Meeting. All director-nominees for the 2015 Annual Meeting, if elected, will serve for an annual term expiring at the following annual meeting of shareholders.

Under the resignation policy adopted by the board of directors and included in our Corporate Governance Guidelines, if a director nominee in an uncontested election receives a greater number of votes “withheld” from his or her election than votes “for” such election, the director must promptly tender his or her resignation to the board of directors. The board of directors will then decide whether to accept the tendered resignation within 90 days following certification of the shareholder vote (based on the recommendation of the corporate governance and nominating committee, which is comprised exclusively of independent directors). We will publicly disclose the board of directors’ decision and its reasoning with regard to the offered resignation.

 

Information about our director nominees is included below. There are no family relationships between any director, executive officer, or person nominated to become a director, except that J. LaMont Keen, a member of our board of directors, is the brother of Steven R. Keen, our and Idaho Power’s senior vice president, CFO, and treasurer. While we expect that all of the nominees will be able to qualify for and accept office, if for any reason one or more should be unable to do so, the proxies will be voted for nominees selected by the board of directors. The composition of our board of directors is identical to the composition of Idaho Power’s board of directors. Where indicated by an “^” the company is a U.S. public reporting company. Where indicated by an “*” the company is a subsidiary of IDACORP.

Nominees for Election

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	J. LAMONT KEEN
	Age: 62	Committees:	Other Directorships (since):
	Director Since: 2004	● None	● Cascade Bancorp (2011)^ ● Idaho Power Company (2004)*^
Additional Information	● Former president and CEO of IDACORP from 2006 to 2014   ● Former CEO of Idaho Power from 2012 to 2013   ● Former president and CEO of Idaho Power from 2005 to 2011; executive vice president of IDACORP from 2002 to 2006; president and chief operating officer of Idaho Power from 2002 to 2005; senior vice president - administration and chief financial officer of IDACORP and Idaho Power from 1999 to 2002; senior vice president - administration, chief financial officer and treasurer of IDACORP and Idaho Power in 1999; vice president, chief financial officer and treasurer of Idaho Power from 1996 to 1999; vice president and chief financial officer of Idaho Power from 1991 to 1996; controller of Idaho Power from 1988 to 1991
Other Skills and Qualifications	As our former president and CEO, with over 40 years of experience at Idaho Power, including over 26 years in a capacity as an officer, Mr. Keen developed an expansive understanding of our company, our state, and the electric utility industry. Mr. Keen’s detailed institutional knowledge of our operations, finances, and executive administration and his active industry involvement make him a key resource and contributor to our board of directors.

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	CHRISTINE KING
	Age: 65	Committees:	Other Directorships (since):
	Director Since: 2006	● Compensation ● Executive	● QLogic Corp (2013)^ ● Cirrus Logic, Inc. (2013)^ ● Skyworks Solutions, Inc. (2014)^ ● Idaho Power Company (2006)*^
Additional Information	● Former president and CEO and director of Standard Microsystems Corporation, a silicon-based integrated circuits company, from 2008 to 2012   ● Former CEO and director of AMI Semiconductor from 2001 to 2008   ● Former director of Open Silicon, Inc. from 2008 to 2012   ● Former director of Atheros Communications, Inc., a developer of semiconductor system solutions for wireless and other network communications products, from 2008 to 2011   ● Former director of ON Semiconductor, a supplier of silicon solutions for green electronics, from March 2008 to October 2008   ● Former director of Analog Devices, a manufacturer of analog and digital signal processing circuits, from 2001 to 2008
Other Skills and Qualifications	Ms. King brings a key element of business diversity to our board of directors with her advanced level of experience and success in the high-tech industry. Her experience from serving as the former CEO of Standard Microsystems Corporation and former CEO of AMI Semiconductor, as well as her service on the boards of other public companies, provides important perspectives for our board of directors’ deliberations.

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Committees of the Board of Directors

Overview

Our standing committees of the board of directors are the audit committee, the compensation committee, the corporate governance and nominating committee, and the executive committee. The committee memberships as of the date of this proxy statement are set forth below. We also describe our board committees and their principal responsibilities following the table. 

 

1	Independent according to New York Stock Exchange listing standards and our Corporate Governance Guidelines

2	Committee chairperson

3	Will retire from the board of directors effective immediately prior to the Annual Meeting

Audit Committee

 

The audit committee is a separately designated standing committee. The audit committee:

 

●

assists the board of directors in the oversight of the integrity of our financial statements; our compliance with legal and regulatory requirements; the qualifications, independence, and performance of our independent registered public accounting firm; the performance of our internal audit department; and our major financial risk exposures;

●

monitors compliance under the code of business conduct for our officers and employees and the code of business conduct and ethics for our directors, and is responsible for considering and granting any waivers for directors and executive officers from the codes, and informs the general counsel immediately of any violation or waiver; and

●	prepares the audit committee report required to be included in the proxy statement for our annual meeting of shareholders.

 

 

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The compensation committee and the board of directors have sole responsibility to determine executive officer compensation, which responsibility may not be delegated. The compensation committee has sole authority to retain and terminate any consulting firm to assist the compensation committee in carrying out its responsibilities, including sole authority to approve the consulting firm’s fees and other retention terms. In 2014, the compensation committee retained Pay Governance, LLC (“Pay Governance”) for advice regarding executive officer compensation, primarily to provide the compensation committee with general compensation market information and trends, to review the structure of our compensation programs, and to provide insight and analysis to the compensation committee at committee meetings. Management and the compensation committee also reviewed data provided by Pay Governance in evaluating our compensation and benefit plans.

In addition, the compensation committee has responsibility for reviewing and making recommendations with respect to director compensation to the board of directors. For information on director compensation, refer to Director Compensation for 2014 in this proxy statement.

Each member of the compensation committee is independent under our Corporate Governance Guidelines and applicable New York Stock Exchange listing standards. During 2014, the compensation committee met five times. 

Each member of the corporate governance and nominating committee is independent under our Corporate Governance Guidelines and the applicable New York Stock Exchange listing standards. During 2014, the corporate governance and nominating committee met four times.

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Executive Committee

The executive committee acts on behalf of the board of directors when the board of directors is not in session, except on those matters that require action of the full board of directors. The executive committee also assists the board of directors in overseeing risk management. The executive committee is composed of our CEO and the chairpersons of each of our other standing committees. During 2014, the executive committee met once.

 

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The board of directors adopted amended stock ownership guidelines for non-employee directors in January 2012, which provide that each non-employee director is expected to own IDACORP common stock equal in value to three times his or her current base annual retainer fee. A director is allowed three years to meet these requirements. As of December 31, 2014, all of our directors were in compliance with the amended guidelines. Once a director reaches the stock ownership target under the guidelines, based on the then-current stock price, the director will remain in compliance with the guidelines, despite future changes in stock price, as long as the director continues to own the minimum number of shares that brought the director into compliance with the stock ownership target. If the base annual retainer fee increases, directors who have already met their stock ownership targets will need to meet the stock ownership guidelines only for the amount of increase in the base annual retainer fee.

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We set rigorous performance goals for our short- and long-term incentive compensation programs to assure that payouts are only earned upon strong performance. The nature of the 2014 performance goals and their respective weightings for our short- and long-term incentive compensation were unchanged from 2013 and are illustrated in the charts that follow (“CEPS” refers to cumulative earnings per share and “TSR” refers to relative total shareholder return).

 

Short-term Incentive (One Year)	Long-term Incentive (Three Year)

 

By using metrics tied to both operational and financial performance, as shown in the charts above, our executives’ annual compensation can vary considerably depending on our actual performance in any period. This is what we refer to as the “at risk” component of our executives’ compensation. 

Each year our compensation committee reviews and establishes a threshold, target, and maximum performance level for each of our short- and long-term incentive plan goals. The compensation committee seeks to establish performance levels that assure the goals properly reflect our performance, are realistic enough to be achievable, and are difficult enough to incentivize outstanding performance. The compensation committee establishes the required performance levels for our incentive plan goals every year to encourage continuous performance improvement. For our two short-term incentive operational goals of customer satisfaction and service reliability, through 2014 we have either maintained or increased the target performance levels each year since the operational goals were first adopted in 2006. For our short-term incentive financial goal of consolidated net income (net income attributable to IDACORP), we have increased the target performance level significantly, from a target of $82 million in 2007 to $172 million in 2014. For our long-term incentive goal of CEPS, we have also increased the target performance level significantly, from $6.20 for the 2007-2009 performance period to $10.45 for the 2014-2016 performance period. Our other long-term incentive goal, TSR, is a relative goal and thus we have not increased the target performance level for that goal, which for 2014 grants continued to require 55^th percentile performance versus our total shareholder return comparison group in order to be earned at target. 

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We seek to establish performance metrics for incentive compensation that reward our executive officers for achieving objectives that align with our shareholders’ interests. In connection with its annual review of executive compensation, our compensation committee reviews the correlation between our executives’ historical compensation and our historical performance. We believe that one of the primary metrics of importance to our shareholders is TSR, reflective of both capital gains and dividends. The graph below shows the correlation between our CEO’s actual compensation as described in the graph and TSR. For 2009 through 2013, the graph reflects our former CEO’s compensation and, for 2014, the graph reflects Mr. Anderson’s compensation, as he was our CEO during most of 2014.

 

 

We believe that earnings per share is also a metric of importance to our shareholders, and it is an input used in determining both short- and long-term incentive compensation. The graph below also shows the correlation between diluted earnings per share (as adjusted following adoption of Accounting Standards Update 2014-01 in 2013) and our CEO’s actual compensation as described in the graph. Again, the compensation shown for 2009 through 2013 is for our former CEO and the compensation shown for 2014 is for Mr. Anderson, our current CEO.

 

 

Summary of Our NEOs’ Total Target Direct Compensation Compared to Our Peers’ NEOs

As a component of establishing our NEOs’ compensation, we do considerable market benchmarking. The total target direct compensation (base salary plus target short- and long-term incentive compensation) of our NEOs for 2014, compared to the median total target direct compensation of each of the three designated data sets we used for benchmarking our NEO’s 2014 compensation, is summarized in the table that follows.

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1	Increased 3 percent to reflect projected compensation at January 1, 2014.

2	Descriptions of the Peer Group, IOU Survey Data, and General Industry Survey Data sets are included below.

We have historically targeted a range of total target direct compensation for our executive officers of 85 percent to 115 percent of the market median (based on designated data sets) for each executive officer position. The median compensation for each of the three data sets (and a particular element of compensation) used for 2014 compensation decisions varied significantly. For one data set an officer’s compensation may be inside the target range but for another data set outside the target range. The compensation committee uses its judgment in assessing the market data, and may establish compensation levels above or below the range depending on the data set used for comparison, as well as based on the experience, responsibility, and performance of the particular executive officer.

Our Compensation Philosophy and Policy

Compensation decisions for our executive officers, including our NEOs, are made in the context of our overall compensation philosophy. Our executive compensation philosophy is to provide balanced and competitive compensation to our executive officers to ensure that we are able to attract and retain high-quality executive officers, and to motivate our executive officers to achieve performance goals that will benefit our shareholders and customers and contribute to the long-term success and stability of our business without excessive risk-taking. Our board of directors has adopted a written executive compensation policy, and the compensation committee reviews the policy annually. The policy includes the following compensation-related objectives:

 

●	manage officer compensation as an investment with the expectation that officers will contribute to our overall success;

●	recognize officers for their demonstrated ability to perform their responsibilities and create long-term shareholder value;

●	be competitive with respect to those companies in the markets in which we compete to attract and retain the qualified executives necessary for long-term success;

●	be fair from an internal pay equity perspective;

●	ensure effective utilization and development of talent by working in concert with other management processes, such as performance appraisal, management succession planning, and management development; and

●	balance total compensation with our ability to pay.

Components of Our Executive Compensation

Compensation for our executive officers is comprised of the following elements:

 

Base Salary

Base salary consists of fixed cash payments. We pay base salaries in order to provide our executive officers with sufficient regularly paid income and to secure officers with the knowledge, skills, and abilities necessary to successfully execute their job duties and responsibilities. Base salary is based on or adjusted pursuant to a series of factors related to competitiveness of the base salary and the officer’s position, experience, and individual and company performance.

Short-Term Incentive Compensation

Short-term incentive compensation under our Executive Incentive Plan is based on annual performance goals and is intended to encourage and reward short-term financial and operational performance results. We provide executive officers the opportunity to earn cash-based short-term incentives in order to be competitive from a total compensation standpoint and to ensure focus on annual financial, operational, and customer service goals.

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We believe that providing these compensation components meets our fundamental compensation objectives of attracting and retaining qualified executives and motivating those executives to achieve key performance goals for the benefit of our customers and shareholders, as demonstrated by our ability to retain officers over the long term, which has helped us to establish a cohesive executive team that takes a long-term view and has delivered superior results for our shareholders and customers.

Role of the Compensation Consultant and Management in Establishing Executive Compensation

The compensation committee, our compensation consultant, and management all participate in the process of setting executive compensation. The compensation committee has primary responsibility for determining the compensation provided to our executive officers. The compensation committee receives information and advice from its independent compensation consultant and from management to make its determinations of executive officer compensation, which the committee then recommends to the full board of directors for approval.

The compensation committee retained Pay Governance for advice regarding executive officer compensation for 2014, primarily to provide the compensation committee with general compensation market information and trends, to review the structure of our compensation programs, and to provide insight and analysis to the compensation committee. During 2014, Pay Governance did not provide services to us beyond its advice regarding executive officer and director compensation, as directed by the compensation committee. In connection with its retention of Pay Governance as an advisor, the compensation committee assessed the independence of the compensation consultant and determined that the compensation consultant was independent. In September 2013, and again in January 2014 in connection with the execution of an engagement agreement, the compensation committee also evaluated whether the work to be performed by the compensation consultant would raise any conflicts of interest, and determined that no such conflicts of interest existed.

Our executive officers are also involved in the process of reviewing executive compensation. Mr. Anderson, Mr. Steven Keen, our vice president of human resources, and our corporate secretary regularly attend compensation committee meetings. Our CEO and several of our other executive and senior vice presidents review and comment on the market compensation data, including the make-up of the Peer Group, IOU Survey Data set, and General Industry Survey Data set and the description of comparable officer positions. Our CEO and the other participating executive and senior vice presidents utilize the competitive market data, along with other factors related to an executive officer’s position, experience, and individual performance, to develop proposed compensation levels for the executive vice presidents, senior vice presidents, or vice presidents that report to them. Our executive officers also

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review and recommend performance goals and goal weightings for our short-term and long-term incentive plans. Our CEO presents these compensation proposals to the compensation committee, which reviews and may modify the proposals before approving them. Our CEO is not involved in the review of his own compensation, though he does prepare and deliver a self-evaluation to the compensation committee, and performs and delivers to the compensation committee an evaluation of the performance of other executive officers.

The Process, Data, and Metrics We Use for Establishing Executive Compensation

Consistent with prior years, our 2014 executive compensation decisions were made in the following four steps:

(1)	conduct a general review of the components of executive compensation and industry practices and consider potential changes;

(2)	analyze peer groups and market data to assess competitiveness of compensation and consider potential changes;

(3)	review total compensation structure, internal pay equity analysis, and the allocation of various forms of compensation; and

(4)	review organizational results and individual executive officer performance, responsibility, and experience to determine compensation levels and opportunities for each executive officer.

Market Compensation Data and Analysis

We believe that market compensation information is important because it provides an indication of the levels of compensation that are needed to enable us to remain competitive with other companies in attracting and retaining executive officers. In establishing and annually assessing our peer groups for compensation purposes, we consider the following factors:

✓	Breadth –include companies that are philosophically relevant

✓	Nature and complexity of the business – take into account each company’s portfolio and markets, and seek companies that derive at least 70 percent of revenues from regulated operations

✓	Scope – reflect an appropriate range of revenues and market capitalization

✓	Ease of administration – ensure availability of valid and reliable data (e.g., SEC filings)

✓	Size – include a sufficient number of companies to provide robust data and mitigate volatility

Consistent with historical practice, the market compensation analysis is used to develop a market compensation range for each of our executive officer positions for base salary, short-term incentive compensation, and long-term incentive compensation, and for combinations of these three elements, based on compensation provided to officers in similar positions at peer group companies. Consistent with the process used in 2013, for 2014 the compensation committee reviewed survey data for three sets of companies, described below. The compensation committee reviewed the elements of each officer’s compensation relative to the median for each compensation element for each of the data sets separately. It then determined whether each element of compensation, and the total target direct compensation, were below range, within the desired range (85% to 115% of the median of each data set), or above the range for each officer for each separate data set. 

The two sources of market compensation data used to prepare the market compensation analysis for our 2014 executive officer compensation were:

 

●	Private Survey Data Sources: Towers Watson’s 2013 annual private survey of corporate executive compensation, with the following three subsets of companies:

●	Public Survey Data Source: 2013 public proxy statement compensation data from a designated peer group of companies, listed below (the same companies included in the Peer Group).

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The names of the companies included in the IOU Survey Data set and the General Industry Survey Data set are listed in Appendix A to this proxy statement. Our management and the compensation committee worked together in developing and approving the Peer Group, based in part on data provided by the compensation consultant. The companies in the Peer Group and used for our survey and public proxy data included the following:*

 

*The only change to the Peer Group for 2014, compared to the prior year, was the addition of Allete Inc. 

Because the public proxy compensation data is not as broad or detailed as the private survey data, the compensation committee used the public proxy compensation data as a secondary data source to provide general confirmation of the compensation levels for our NEOs. The compensation committee’s primary information source in assessing competitive compensation levels was the more comprehensive private survey compensation data. For purposes of compiling the market compensation information, each NEO’s role is matched to a comparable position at the peer companies, and the compensation for that comparable position is included in the data set. For purposes of determining 2014 compensation, we believe that Ms. Grow’s oversight responsibility and areas of focus are broader than those of persons with similar titles at many of the companies included in the Peer Group and IOU Survey Data set. The compensation committee took this into consideration when evaluating her compensation.

An individual executive officer’s compensation may be positioned above or below the market level for his or her position, depending on his or her level of experience, responsibility, and performance. The compensation committee uses its judgment and our CEO’s feedback on executive officer performance in assessing experience, responsibility, and performance in determining how an executive officer’s compensation should align relative to the market level.

Review of Total Compensation Structure and Internal Pay Ratios

Each year, the compensation committee reviews the total compensation structure for each NEO. As in prior years, the compensation committee began this process for 2014 compensation decisions with a review of the compensation elements set forth in the Summary Compensation Table and other compensation disclosures from the previous year’s proxy statement. The compensation committee also reviewed an internal pay equity analysis presented by our management, which showed the ratios below for internal pay equity based on proposed (as of the date of the review) 2014 total target direct compensation amounts. The ratios reviewed for 2013 total target direct compensation purposes are also included in the table below and were reviewed by the compensation committee for comparison purposes when establishing 2014 compensation levels.

The review of our executive officers’ levels of historical compensation, potential termination and retirement benefits, internal equity, and IDACORP stock ownership help the compensation committee determine whether it should adjust an executive officer’s total target direct compensation. The compensation committee also reviews the mix of compensation of our executive officers against the structure and mix of compensation of our peers, information about which is provided in connection with the market studies described above. Based on these reviews, the compensation committee determined that no changes to the overall structure of our compensation programs or the forms of compensation payable to our executive officers for 2014 were necessary. In making this determination, the compensation committee relied on its subjective judgment.

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Allocation of Compensation – Policy to Emphasize At-Risk Compensation

Our executive compensation policy provides that various elements of our compensation for executive officers should generally target the ranges in the table that follows.

This structure is intended to provide the appropriate balance between at-risk compensation tied to executive and corporate performance and base salary to promote executive retention. We also apply a policy that provides that the higher the executive officer’s position, the greater the emphasis on long-term results and, therefore, on equity-based compensation. Accordingly, our CEO’s compensation is typically weighted more heavily toward long-term incentive compensation in the form of stock grants compared to our other executive officers’ compensation.

We believe that combined short- and long-term incentive compensation comprising 35 percent to 75 percent of total target compensation is appropriate because:

 

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our executive officers are in positions to drive, and therefore bear high levels of responsibility for, our corporate performance;

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incentive compensation is at-risk and dependent upon our performance and continued employment of the executive officer; and

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making a significant amount of our executive officers’ target compensation contingent upon results that are beneficial to shareholders helps ensure focus on goals that are aligned with our overall strategy.

For 2014 compensation of our NEOs, the percentage of total target direct compensation that was comprised of short- and long-term incentive compensation at target exceeded 50 percent.

Individual Executive Officer Performance Criteria and Evaluation

After the compensation committee reviews the market compensation data and has considered the structure and proper allocation of compensation, it reviews each executive officer’s level of experience and time in the role, responsibility, and individual performance to determine where the executive officer’s base salary and target incentive compensation should be relative to the compensation of peers, keeping in mind the 85 percent to 115 percent target total direct compensation range and the allocation of compensation outlined by our executive compensation policy as described above. For the review of our CEO’s performance, each of our directors completes an annual written evaluation, which addresses strengths, achievements, opportunities for improvement, and other attributes of our CEO’s performance, the results of which are discussed by the full board of directors. This evaluation covers the fourteen attributes in the table that follows.

 

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For other executive officer reviews, our CEO provides to the compensation committee an evaluation of each executive officer’s accomplishments during the year and overall performance under the following primary categories:

 

	●	financial strength		●	customer satisfaction
	●	operational excellence		●	safe, engaged, and effective employees

 

In addition, each executive officer, including our CEO, is evaluated against the following eight competencies:

 

	●	establishing strategic direction		●	operational decision making		●	driving for results
	●	building organizational talent		●	business acumen		●	developing strategic relationships
	●	customer orientation		●	leadership

 

While the general factors used for evaluation are the same, the evaluation of each of our executive officers under each category involves a review of more specific factors relevant to that officer’s position. For instance, in connection with its evaluation of the “operational decision making” competency for an officer involved in Idaho Power’s power supply operations, the compensation committee may take into consideration progress on Idaho Power’s environmental stewardship initiatives, maintenance of Idaho Power’s hydroelectric generation base, improvements in compliance programs, and the matching of Idaho Power’s loads with its resources. These sub-factors considered by the compensation committee vary based on the specific functions and responsibilities of each executive officer. Each executive officer must also generate specific performance goals for each year, which the compensation committee reviews and evaluates in connection with its compensation decisions.

2014 NEO Performance Evaluation Results

In connection with its annual evaluation of our NEOs’ performance, the compensation committee identified the following non-exclusive contributions and accomplishments during 2013 that were relevant to establishing the NEOs’ base salaries and incentive compensation opportunities for 2014:

 

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Consideration of the Results of the Shareholder Advisory Votes on Executive Compensation

Our retention of the same general compensation program design in recent years has been influenced, in part, by the voice of our shareholders, as indicated by the results of prior say-on-pay votes at the 2011, 2012, and 2013 annual meetings, where over 93 percent of votes cast were cast in favor of our executive compensation program. At the 2014 annual meeting, over 97 percent of votes cast were cast in favor of our executive compensation programs. The consistent voting results we received in those years were an important indicator to management, the compensation committee, and the board of directors regarding investor sentiment about our executive compensation philosophy, policies, and practices. As a result, our 2014 compensation program continued to reflect our pay-for-performance philosophy.

Impact of Tax and Accounting Treatment on Compensation Decisions

The compensation committee may consider the impact of tax and/or accounting treatment in determining compensation. Section 162(m) of the Internal Revenue Code places a limit of $1,000,000 on the amount of compensation paid to certain officers that we may deduct as a business expense in any tax year unless, among other things, the compensation qualifies as performance-based compensation, as that term is used in Section 162(m). The compensation committee may structure certain compensation programs in a manner intended to allow compensation to be fully deductible under Section 162(m), but retains the flexibility and discretion to grant compensation awards, whether or not deductible. This flexibility is necessary to foster achievement of performance goals established by the compensation committee, as well as other considerations important to our success, such as encouraging employee retention and rewarding achievement of key corporate goals.

At the 2015 Annual Meeting, shareholders will be requested to re-approve the IDACORP Executive Incentive Plan (for short-term incentive compensation) and the IDACORP 2000 Long-Term Incentive and Compensation Plan (for long-term incentive compensation) to continue to permit performance-based awards granted under the plans to qualify as performance-based compensation under Section 162(m), for compensation under those plans that we intend to be deductible for purposes of Section 162(m).

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Section 409A of the Internal Revenue Code imposes additional income taxes for certain types of deferred compensation if the deferral does not comply with Section 409A. We administer our compensation plans and arrangements affected by Section 409A with the objective of not triggering any additional income taxes under Section 409A.

2014 Named Executive Officer Compensation

Base Salary

As discussed above, the compensation committee reviewed the base salary market data from the market compensation analysis, including a comparison of each NEO’s current base salary with the median from each of the three data sets for that position (where data was available). As a component of determining appropriate 2014 compensation levels, the compensation committee also reviewed the 2013 performance evaluations for each NEO and the company’s overall performance during 2013. Based on its review and analysis of this information, in January 2014 the compensation committee recommended, and the board of directors approved, the NEO base salaries for 2014 shown in the table that follows.

 

1	Represents the increase relative to the amount of annual base salary in effect as of year-end 2013.

2	Mr. LaMont Keen retired as our president and CEO effective April 30, 2014. The amount listed is annual base salary. Mr. LaMont Keen received only a prorated portion of the amount listed as 2014 base salary based on his partial period of service as an officer of our company during 2014.

The notable increase in Mr. Anderson’s base salary resulted in large part from his transition to the president and CEO position at IDACORP and Idaho Power. In January 2012, Mr. Anderson was appointed as Idaho Power’s president and CFO, in connection with a succession planning initiative under which he would ultimately succeed to the president and CEO role at Idaho Power, which occurred on January 1, 2014. He assumed the role of president and CEO of IDACORP in May 2014. Mr. Anderson’s 2013 base salary was substantially less than the average base salaries of the Peer Group, IOU Survey Data set, and General Industry Survey Data set, and thus the compensation committee approved a significant increase in his base salary for 2014. However, given his limited time in the president and CEO role, the compensation committee approved a base salary that was less than the median base salaries of the three data sets.

The notable increase in Steven Keen’s base salary for 2014 compared to 2013 is similarly attributable to his change in title and increased responsibilities as the senior vice president, CFO, and treasurer at IDACORP and Idaho Power. However, as with our CEO’s compensation for 2014, the compensation committee noted Steven Keen’s limited time in the CFO role and approved a base salary that was less than the median base salaries of the three data sets. 

Short-Term Incentive Compensation

For 2014, the compensation committee retained the same short-term incentive goal structure as was used in 2013, described below. While the compensation committee considered whether other metrics would also be appropriate, the compensation committee determined that operational goals of customer satisfaction and network reliability and the financial goal of IDACORP consolidated net income provide effective measures of the overall performance of our company for incentive purposes. The compensation committee also retained the same weightings for the incentive goals as in 2013 – 15 percent for customer satisfaction, 15 percent for network reliability, and 70 percent for consolidated net income. Following is a more detailed description of the 2014 short-term incentive performance goals:

 

●

Customer Satisfaction – The customer satisfaction goal focuses on our relationship with and service to our customers. We measure customer satisfaction through quarterly surveys conducted by an independent survey firm. The customer relationship index details our performance through the eyes of the customer and was based on a rolling four-quarter average for the 2014 calendar year. The survey data covered five specific performance qualities: overall satisfaction, quality, value, advocacy, and loyalty.

 

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●

Network Reliability – The network reliability goal is intended to focus executive officers on Idaho Power’s system reliability and its impact on the company’s relationship with its customers. We measure this goal by the number of interruptions greater than five minutes in duration experienced by Idaho Power’s small and large general service customers. The goal also includes a hurdle of no more than 10 percent of small and large general service customers being subjected to more than six interruptions during the 2014 calendar year. If this hurdle is not met, we will not make a payout for this goal.

 

●

Consolidated Net Income – Our compensation committee believes that the IDACORP consolidated net income goal provides the most important overall measure of our financial performance, and thus the compensation committee gave it the greatest weighting. This goal aligns management and shareholder interests by motivating our executive officers to increase earnings for the benefit of shareholders.

After determining the nature of the 2014 performance goals, the compensation committee set the specific performance targets for each goal, based on three levels of performance: threshold, target, and maximum. For 2014, the compensation committee:

 

●

decreased slightly the performance level for the customer satisfaction goal for the maximum payout level based on its review of customer-facing initiatives in process and historical customer satisfaction metrics;

●

to incentivize continuous improvement, established more challenging network reliability goals at all payout levels, based on its review of factors likely to impact reliability and to incentivize continuous improvement; and

●

established more challenging net income performance goals at all payout levels, based on its review of financial information and to incentivize continuous improvement.

The table below shows the specific threshold, target, and maximum performance targets for each short-term incentive performance goal and the qualifying payout multiplier for each target. We use linear interpolation for achievement between the levels specified. The short-term cash incentive award opportunities are calculated by multiplying base salary by the product of the approved incentive percentage and the qualifying multiplier for each goal. The table also shows the actual 2014 performance results for all three performance goals. The Executive Incentive Plan under which the short-term awards are made to executives does not permit the payment of awards if there is no payment of awards under the employee incentive plan (which uses the same metrics and performance levels) or if IDACORP does not have net income sufficient to pay dividends on its common stock. Neither of these restrictions applied for 2014.

Once the compensation committee established the performance levels and qualifying multipliers for the short-term incentive award design, it then determined the threshold, target, and maximum award amount for each NEO, based on a percentage of base salary. The table that follows shows the 2014 short-term incentive award opportunities for the NEOs recommended by the compensation committee and approved by the board of directors, as well as the 2014 short-term incentive awards earned by our NEOs based on 2014 actual performance results.

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1	The percentage shown represents the percent of base salary to be awarded, assuming achievement of the relevant performance level.

2

Mr. LaMont Keen retired as our president and CEO effective April 30, 2014. The short-term incentive award opportunities reflect amounts calculated based on annual base salary. Based on only a partial year of service, pursuant to the terms of the award, Mr. LaMont Keen received only a prorated portion of the short-term incentive compensation, based on his period of service as an officer of our company during 2014, as reflected in the 2014 Award Earned column.

3	Mr. Minor’s short-term incentive payout for 2014 was decreased by $18,686 due to a short-term period of leave during 2014 for medical reasons.

Based on its review of market compensation and individual NEO performance, for 2014 the compensation committee increased relative to 2013 the percentage of base salary payable as short-term incentive for each of Mr. Anderson (from a target of 65% to 80%), Mr. Minor (from a target of 55% to 60%), and Steven Keen (from a target of 45% to 50%). Similar to their base salary increases, for Mr. Anderson and Steven Keen these increases were approved in light of their transition to new positions and their performance during 2013, and were in large part intended to bring their target short-term award opportunity closer to the target award opportunity of the survey data set. For Mr. Minor, the increase was reflective of the significant scope of his responsibilities within, and contributions to, our company, and his performance during 2013. As noted in footnote 2 to the table above, pursuant to the terms of the award, Mr. LaMont Keen’s 2014 short-term incentive award was prorated based on his period of service as an officer of our company during 2014.

Long-Term Incentive Compensation

Our 2014 long-term incentive awards were allocated as follows:

 

●

time-vesting restricted stock, vesting in January 2017, representing one-third of the awards; and

●

performance-based shares with a three-year performance period of 2014-2016, representing two-thirds of the awards.

Consistent with our historical practice, the compensation committee recommended, and the board of directors approved, the 2014 long-term incentive grants at their February 2014 meetings, which occurred after we released our 2013 full year earnings. Following is a more detailed description of the time-vesting restricted stock and performance-based shares that comprise the long-term incentive grants.

Time-Vesting Restricted Stock:

The time-vesting restricted stock awards made to our NEOs in 2014 will vest in January 2017, as long as the NEO remains employed by us throughout the restriction period. The NEOs receive dividends on the stock during the restriction period, since the officer is assured of vesting in the stock as long as he or she remains employed by the company. We believe that the restricted stock and dividend payments provide a strong incentive for the officer to continue working for us for the entire three-year restriction period. Because the restricted stock is intended to serve as a retention tool, the compensation committee decided to use cliff vesting, rather than ratable vesting. However, if the NEO’s employment terminates before the vesting date, subject to board approval, the officer may receive a pro-rated payout, depending on the reason for or circumstances surrounding the termination.

Performance-Based Shares:

Performance-based shares are based entirely on our financial performance over a three-year performance period and may be earned up to 150 percent of target, but will not be earned if our minimum performance goals are not met at the end of the performance period. For instance, all performance-based shares for the performance periods ending in the years 2003, 2004, and 2005 were forfeited. Dividends on the performance-based shares are not paid to our NEOs during the performance period. Instead, they are paid at the end of the performance period only on performance-based shares that are actually earned, if any.

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The performance-based shares granted in February 2014 may be earned by the NEOs based on performance against two financial measures over the 2014-2016 performance period. The two equally weighted performance measures are CEPS and TSR. We believe these performance metrics represent key measures of performance for the benefit of our shareholders and align our executive officers’ management efforts with our shareholders’ performance objectives. The CEPS levels are indicative of management performance, as this goal relates to revenue enhancement and cost containment. Relative TSR is determined by our common stock price change and dividends paid over a three-year performance period compared to that achieved by a comparison group of companies over the same three-year period. For 2014 grants, we used the EEI Index of U.S. Shareholder-Owned Electric Utilities as the TSR comparison group. We compare our TSR with these companies’ TSRs on a percentile basis. For example, if our TSR falls exactly in the middle of the TSR of the comparison companies, we would rank at the 50^th percentile of the comparison group.

The CEPS performance levels for the 2014-2016 performance period are as follows:				The TSR performance levels for the 2014-2016 performance period are as follows:
	-Threshold:	$9.60			-Threshold:	35th percentile
	-Target:	$10.45			-Target:	55th percentile
	-Maximum:	$11.35			-Maximum:	75th percentile

 

The compensation committee increased the CEPS performance levels for 2014 compared to the levels approved in 2013 based on its assessment of our historical and potential performance and the potential impact of existing and potential future regulatory mechanisms. The compensation committee also sought to approve amounts that would motivate our NEOs to drive company performance. The compensation committee left the relative TSR levels unchanged compared to the 2013 levels.

The table that follows shows the long-term incentive award opportunities recommended by the compensation committee and approved by our board of directors for 2014 for each NEO. We use linear interpolation for achievement within the levels specified. 

 

1

Mr. LaMont Keen retired as our president and CEO effective April 30, 2014. The long-term incentive award opportunities reflect amounts calculated based on annual base salary. Based on only a partial year of service as an officer of our company, pursuant to the terms of the award, Mr. LaMont Keen was entitled to received only a prorated portion of the amount listed as long-term incentive compensation.

As with base salary and short-term incentive opportunities, the compensation committee established the 2014 long-term incentive opportunities based on its review of the market compensation analysis and individual executive officer experience and both

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individual and company performance. Following its review, the compensation committee increased the 2014 target long-term incentive award opportunities as a percentage of base salary for each of Mr. Anderson (from 110% to 135%), Mr. Minor (from 100% to 110%), and Steven Keen (from 70% to 90%), compared to the target level for 2013, based on the same factors that resulted in increasing the 2014 target short-term incentive compensation levels. As noted in footnote 1 to the table above, pursuant to the terms of the award, Mr. LaMont Keen’s award was prorated based on his period of service as an officer of our company during the 2012-2014 performance period. In accordance with the terms of the awards, the shares granted as long-term incentive for the 2013-2015 and 2014-2016 performance periods were also prorated based on Mr. LaMont Keen’s period of service as an officer of our company during the applicable performance periods.

The performance-based shares granted for the 2011-2013 performance period were paid at 118.75 percent of target in February 2014, based on our CEPS of $10.37 and our relative TSR at the 50^th percentile. The table that follows lists (1) the target performance-based share awards granted, (2) the shares issued, and (3) the dividend equivalent payments earned.

 

Executive	Awards Granted in February 2011 (#)	Shares Issued in February 2014 (#)	Dividend Equivalents ($)
J. LaMont	15,156	17,998	82,521
Darrel T. Anderson	6,094	7,238	33,078
Daniel B. Minor	5,728	6,802	31,085
Rex Blackburn	3,342	3,970	18,143
Lisa A. Grow	2,970	3,528	16,123
Steven R. Keen	1,830	2,174	9,935

 

The performance-based shares granted for the 2012-2014 performance period were paid at 150 percent of target in February 2015, based on our CEPS of $10.88 and our relative TSR at the 79^th percentile. The table below lists (1) the target performance-based share awards granted, (2) the shares issued, and (3) the dividend equivalent payments earned.

 

Executive	Awards Granted in February 2012 (#)	Shares Issued in February 2015 (#)	Dividend Equivalents ($)
J. LaMont Keen1	14,800	17,266	89,265
Darrel T. Anderson	7,504	11,256	58,194
Daniel B. Minor	6,252	9,378	48,484
Rex Blackburn	3,410	5,116	26,450
Lisa A. Grow	2,956	4,434	22,924
Steven R. Keen	2,956	4,434	22,924

 

1

Mr. LaMont Keen retired as our president and CEO effective April 30, 2014. Accordingly, pursuant to the terms of the award, the number of shares Mr. LaMont Keen received in February 2015 was prorated based on the number of months he was an officer of the company during the 2012-2014 performance period.

Post-Termination Compensation Programs

Idaho Power Company Retirement Plan

The Idaho Power Company Retirement Plan is available to all of our full-time employees. We discuss the material terms of the plan later in this proxy statement in the narrative following the Pension Benefits for 2014 table. Because benefits under the plan increase with an employee’s continued service and earnings, the compensation committee believes that providing a pension serves as an important retention tool by encouraging our employees to make long-term commitments to the company.

Idaho Power Company Security Plans for Senior Management Employees

We have two nonqualified defined benefit plans that provide supplemental retirement benefits for certain key employees beyond our retirement plan benefits – the Security Plan for Senior Management Employees I, or Security Plan I, and the Security Plan for Senior Management Employees II, or Security Plan II. We have two separate plans to take advantage of grandfathering rules under

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Section 409A of the Internal Revenue Code. The compensation committee views these supplemental retirement benefits as a key component in attracting and retaining qualified executives. Benefits under the security plans continue to accrue for up to 25 years of continuous service at a senior management level. Because benefits under the security plans increase with period of service and earnings, the compensation committee believes that providing a supplemental pension under these plans serves as an additional retention tool that encourages our executives to make long-term commitments to the company. The security plans provide income security for our executives and are balanced with the at-risk compensation represented by our incentive plans. We discuss the other material terms of the security plans later in this proxy statement in the narrative following the Pension Benefits for 2014 table.

Executive Deferred Compensation Plan

Our executive officers are eligible to participate in the Executive Deferred Compensation Plan, which is a nonqualified supplemental deferred compensation plan that allows participants to defer compensation in excess of certain statutory limits in the tax-qualified 401(k) plan. Participants may defer up to 50 percent of base salary and up to 50 percent of any short-term incentive compensation. The compensation committee views the plan as a supplemental benefit to attract and retain qualified executive officers. For 2014, no NEO made any contributions to the plan. We discuss the material terms of the plan later in this proxy statement in the narrative following the Nonqualified Deferred Compensation for 2014 table.

Change in Control Agreements

We have change in control agreements with all of our executive officers. The compensation committee believes that change in control agreements are an important benefit to promote officer retention during periods of uncertainty around acquisitions and to motivate officers to weigh acquisition proposals in a balanced manner for the benefit of shareholders, rather than resisting such proposals for the purpose of job preservation.

The compensation committee adopted a new policy regarding stand-alone change in control agreements in November 2009, and the compensation committee approved a new form of change in control agreement in March 2010. As provided in the new policy, change in control agreements executed after March 17, 2010, do not include any 13^th-month trigger (a provision permitting an officer to terminate employment for any reason during the first month following the one-year anniversary of the change in control and receive a reduced payout) or tax gross-up provisions. The compensation committee made these changes based on the growing trend away from single-trigger and modified single-trigger provisions and tax gross-up provisions in executive change in control agreements. Existing change in control agreements were not affected by the new policy. All of our NEOs are parties to change in control agreements executed prior to March 17, 2010.

The agreements we have with our current NEOs are “double-trigger” agreements in the sense that two events must occur in order for cash severance payments to be made: a change in control and a termination of employment in connection with the change in control. However, if a change in control occurs and the officer is not terminated, the agreements permit a NEO to terminate employment for any reason during the first month following the one-year anniversary of the change in control. In this event, the NEO would receive a lesser severance payout. This provision was historically included because the first year after a change in control is a critical transition period, and the 13^th-month trigger serves as an important tool to encourage our executive officers to remain with the company or our successor.

We discuss the other material terms of our change in control agreements later in this proxy statement in the section entitled Potential Payments Upon Termination or Change in Control.

Other Compensation Practices

Clawback Policy

In January 2014, our board of directors adopted a compensation clawback policy. Under the clawback policy, if our board of directors determines that a current or former executive officer has engaged in fraud, willful misconduct, gross negligence, or a violation of one of our policies that caused or otherwise contributed to the need for a material restatement of our financial results, the compensation committee will review all performance-based compensation earned by that executive officer during fiscal periods materially affected by the restatement. If, in the compensation committee’s view, the performance-based compensation would have been materially lower if it had been based on the restated results, the compensation committee will, to the extent permitted by applicable law, seek recoupment from that executive officer of any portion of such performance-based compensation as it deems appropriate under the circumstances. The compensation committee has sole discretion in determining whether an executive officer’s

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conduct has or has not met any particular standard of conduct under law or a company policy. The clawback policy applies to performance-based compensation awards made after the adoption of the policy.

Prohibitions on Hedging Transactions and Pledges of Our Securities

Our compensation policy and corporate governance guidelines prohibit executive officers (as well as directors) from hedging their ownership of company common stock. Under our policy, an executive officer may not enter into transactions that allow the officer to benefit from devaluation of our stock or be the technical legal owner of our stock without the full benefits and risks of such ownership. In addition, our corporate governance guidelines provide that our directors, officers, and certain key employees are prohibited from pledging (through a margin feature or otherwise) our securities as collateral in order to secure personal loans or other obligations.

Stock Ownership and Stock Retention Guidelines

Our board of directors, upon recommendation of the corporate governance and nominating committee, adopted minimum stock ownership guidelines for our officers in November 2007. Company stock ownership enhances our officers’ commitment to our future and further aligns our officers’ interests with those of our shareholders. The guidelines require ownership of IDACORP common stock valued at a multiple of each officer’s annual base salary, as follows:

●	president and chief executive officer – 3x annual base salary;

●	executive and senior vice presidents – 2x annual base salary; and

●	vice presidents – 1x annual base salary.

Our graduated stock ownership requirements reflect the fact that compensation is weighted more heavily toward equity compensation for our most senior positions. Officers are provided five years to meet the guidelines, commencing on the effective date of appointment, including by virtue of a promotion to a position that requires a greater multiple of common stock ownership. In circumstances where the stock ownership guidelines would result in a severe financial hardship, the officer may request an extension of time from the corporate governance and nominating committee to meet the guidelines.

Our board of directors has also adopted minimum stock retention guidelines for our officers to further align our officers’ interests with shareholder interests. The guidelines state that until the officer has achieved the minimum stock ownership requirements described above, the officer must retain at least 50 percent of the net shares he or she receives from the vesting of restricted and performance-based share awards and stock option exercises. For restricted and performance-based shares, “net shares” means the number of shares acquired upon vesting, less the number of shares withheld or sold to pay withholding taxes.

Compensation Risk and Discretion to Adjust Awards

We believe that our mix of compensation elements and the design features of our plans described in this Compensation Discussion and Analysis help to ensure that our executive officers focus on the long-term best interests of our company and its shareholders, with appropriate incentives to avoid taking excessive risks in pursuit of unsustainable short-term results. The compensation committee and our board of directors retain the discretion to adjust awards under the short- and long-term incentive plans, when deemed appropriate, including in any circumstance where the compensation committee or our board of directors believes there has been misconduct by one or more executive officers. Further, the compensation clawback policy described above provides that we may seek to recoup incentive compensation in specified circumstances, to discourage unlawful or grossly negligent conduct.

 

Compensation Committee Report The compensation committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based on its review and these discussions, the compensation committee has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2014.
	THE COMPENSATION COMMITTEE
		Christine King, Chair
		Judith A. Johansen
		Ronald W. Jibson

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Our Compensation Policies and Practices as they Relate to Risk Management

We have reviewed our compensation policies and practices for all employees and concluded that any risks arising from these policies and practices are not reasonably likely to have a material adverse effect on our company. At least annually, members of our human resources department and executive management met to discuss risks that may arise from our compensation policies and practices. For 2014, the discussions involved a review and consideration of several of the factors set forth in Item 402(s) of Regulation S-K under the Securities Act of 1933, as amended, as well as the following items:

 

●	the vast majority of IDACORP’s income from continuing operations is contributed by Idaho Power, which is a regulated electric utility, and management believes its regulated operations do not lend themselves to or incentivize significant risk-taking by employees;

●	our employees and executives are limited from taking operational risks by the extensive regulation of our operations by multiple agencies, including the Federal Energy Regulatory Commission and state public utility commissions;

●	we use a balanced and diverse compensation structure designed to link an appropriate portion of compensation to the company’s long-term performance, while at the same time capping the maximum incentive payouts and providing a base salary, to prevent undue emphasis on incentive compensation;

●	we benchmark compensation to be consistent with industry practice;

●	we impose stock retention obligations,

●	we have a compensation clawback policy, and the board of directors and compensation committee retain discretion to adjust awards as they deem necessary;

●	incentive compensation is based on performance metrics that are consistent with our long-term goals, and those metrics are both financial and operational;

●	we have internal controls and standards of business conduct that support our compensation goals and mitigate risk, and we use internal and external auditing processes on a regular basis to ensure compliance with these controls and standards; and

●	the compensation committee, the members of which are independent, oversees our compensation policies and practices and is responsible for reviewing and approving executive compensation, and it considers potential risks when evaluating executive compensation policies and practices.

 

At its November 2013 meeting, in advance of making executive compensation decisions for 2014, the compensation committee members discussed, together with management and its compensation consultant, the factors above and whether our compensation programs incentivized risk-taking behavior. The compensation committee undertook this same analysis at its November 2014 meeting. In each case, the compensation committee analyzed the fixed and variable components of compensation and considered whether a balance between prudent business risk and resulting reward is maintained. After this evaluation, the compensation committee determined that our compensation practices do not increase the company’s risk exposure. The compensation committee has also observed that the company has an extensive risk management policy and that the company’s compensation practices are not a significant factor in the overall risk profile of the company’s business.

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The following tables set forth information about the compensation paid to or accrued by our NEOs for services in all capacities to IDACORP and its subsidiaries. The amounts set forth as compensation in the tables are calculated and presented pursuant to applicable Securities and Exchange Commission and accounting rules and may not represent amounts actually realized by the NEOs for the periods presented.

2014 Summary Compensation Table

 

1

Amounts in this column represent the aggregate grant date fair value of the time-vesting restricted stock and the performance-based shares (at target) granted in each of the years shown calculated in accordance with FASB ASC Topic 718, the full grant date fair value for the market-related TSR component of the performance-based shares for the entire three-year performance cycle is included in the amounts shown for 2014 (the year of grant) and was determined using a Monte Carlo simulation model. The column was prepared assuming none of the awards will be forfeited. Additional information on the assumptions used to determine the fair value of the restricted stock and performance-based share awards is contained in Note 7 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, on file with the U.S. Securities and Exchange Commission. Due to Mr. LaMont Keen’s retirement effective April 30, 2014, he forfeited a prorated portion of the time-vesting restricted stock and performance-based shares granted in 2014.

The table below shows the grant date fair values of the CEPS component of the performance-based share awards granted in 2014, assuming that the highest levels of performance conditions are achieved for the awards. The grant date fair value for the market-related TSR component is not subject to probable or maximum outcome assumptions.

2

Values shown represent the change in actuarial present value of the accumulated benefit under the Idaho Power Company Retirement Plan and Security Plan I and Security Plan II, as applicable. Assumptions included a discount rate of 4.2% for 2012, 5.2% for 2013, and 4.25% for 2014; use of the RP-2000 Annuitant Mortality Table with Scale AA Generational Projection for 2012 and 2013 and the RP-2014 Total Health Annuitant Mortality, Male & Female, with male rates loaded 6% and female rates loaded 12% plus MP-2014 Generational Projection Scale adjusted with a 10-year conversion period to an ultimate improvement rate of 0.75%, for 2014; and retirement at age 62. There were no above-market earnings on deferred compensation in 2014.

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3	For 2014, includes our contribution to the Idaho Power Company Employee Savings Plan, which is our 401(k) plan, and a charitable match contribution for each of Mr. LaMont Keen, Mr. Anderson, Mr. Minor, Ms. Grow, and Mr. Steven Keen. For Mr. LaMont Keen, also see footnote 4 below.

4

Mr. LaMont Keen retired as our president and CEO effective April 30, 2014, but remains a member of our board of directors. The amount reported under the Salary column for Mr. LaMont Keen includes a payment in cash of $28,940 for accrued but unused vacation benefits upon retirement. Prior to April 30, 2014, he did not receive compensation for his services as a director. The amount reported under the All Other Compensation column for Mr. LaMont Keen includes $89,283 in compensation received by Mr. LaMont Keen after April 30, 2014 for his role as a director. See the Director Compensation for 2014 table in this proxy statement.

5	Mr. Anderson became president and CEO of IDACORP on May 1, 2014 and of Idaho Power on January 1, 2014.

6	The aggregate change in actuarial present value of Ms. Grow’s accumulated benefit under the Idaho Power Company Retirement Plan and Security Plan II for 2013 was ($27,836).

7	Mr. Steven Keen became senior vice president, CFO, and treasurer of IDACORP on May 1, 2014 and of Idaho Power on January 1, 2014.

Grants of Plan-Based Awards in 2014

1	Represents short-term incentive cash compensation for 2014 awarded pursuant to the IDACORP Executive Incentive Plan. Actual short-term incentive payouts during 2014 are shown in the “Non-Equity Incentive Plan Compensation” column of the 2014 Summary Compensation Table.

2	Represents time-vesting restricted stock awarded pursuant to the IDACORP 2000 Long-Term Incentive and Compensation Plan.

3	Represents performance-based shares for the 2014-2016 performance period awarded pursuant to the IDACORP 2000 Long-Term Incentive and Compensation Plan.

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2014 Short-Term Incentive Awards

Consistent with prior years, in 2014 the compensation committee approved short-term incentive award opportunities for our NEOs. The short-term cash incentive award opportunities are calculated by multiplying base salary by the product of the approved incentive percentage and the qualifying multiplier for each goal. We discuss the short-term incentive award opportunities and results in more detail in the Compensation Discussion and Analysis.

2014 Long-Term Incentive Awards

In February 2014, the compensation committee approved long-term incentive awards with the following two components:

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Time-vesting shares: Each NEO received an award of time-vesting restricted shares equal to a percentage of his or her base salary in 2014. These shares vest in January 2017 if the NEO remains continuously employed with the company during the entire restricted period. Dividends are paid on the shares during the restricted period and are not subject to forfeiture.

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Performance-based shares: Each NEO received an award of performance-based shares at the target level equal to a percentage of his or her base salary in 2014. The shares will vest at the end of the three-year performance period to the extent we achieve our performance goals (CEPS and TSR, weighted equally) and the NEO remains employed by the company during the entire performance period, with certain exceptions. Dividends will accrue during the performance period and will be paid in cash based on the number of shares that are earned. Performance-based shares are paid out in accordance with the payout percentages set forth in the Compensation Discussion and Analysis.

We discuss in further detail the long-term incentive award opportunities and results in the Compensation Discussion and Analysis.

Salary and Bonus in Proportion to Total Compensation

The following table shows the proportion of salary and bonus to total compensation for 2014:

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Outstanding Equity Awards at Fiscal Year-End 2014