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TABLE OF CONTENTS

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

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  o

 

Check the appropriate box:

o

Preliminary Proxy Statement

o

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x

Definitive Proxy Statement

o

Definitive Additional Materials

o

Soliciting Material under §240.14a-12

 

DUKE ENERGY CORPORATION

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

x

No fee required.

o

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

(1)

Title of each class of securities to which transaction applies:

 

 

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

 

(4)

Proposed maximum aggregate value of transaction:

 

 

 

 

(5)

Total fee paid:

 

 

 

o

Fee paid previously with preliminary materials.

o

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

Amount Previously Paid:

 

 

 

 

(2)

Form, Schedule or Registration Statement No.:

 

 

 

 

(3)

Filing Party:

 

 

 

 

(4)

Date Filed:

 

 

 

 


Table of Contents

GRAPHIC

    Welcome to the
Duke Energy Annual
Shareholder Meeting
 
GRAPHIC

March 20, 2014

Dear Fellow Shareholders:

I am pleased to invite you to our annual shareholder meeting to be held on Thursday, May 1, 2014, at 10:00 a.m. in the O.J. Miller Auditorium located at 526 South Church Street in Charlotte, North Carolina.

As explained in the enclosed proxy statement, at this year's meeting you will be asked to vote (i) for the election of directors, (ii) for the ratification of the selection of the independent public accountant, (iii) for the approval, on an advisory basis, of Duke Energy Corporation's named executive officer compensation, (iv) for the amendment to Duke Energy Corporation's Amended and Restated Certificate of Incorporation to authorize shareholder action by less than unanimous written consent, (v) against two shareholder proposals, and (vi) to consider any other business that may properly come before the meeting.

This year's proxy statement includes certain items such as a proxy statement summary on page 6 and certain charts and illustrations to help better explain our corporate governance and compensation programs and objectives. With this document, our aim is to communicate with you the matters to be addressed at the meeting in a way that is simple and straightforward.

Your vote is important – exercise your shareholder right and vote your shares right away.

Please turn to page 12 for the instructions on how you can vote your shares over the Internet, by telephone or by mail. It is important that all Duke Energy shareholders, regardless of the number of shares owned, participate in the affairs of the Company. At Duke Energy's 2013 Annual Shareholder Meeting, approximately 84 percent of the Company's outstanding shares were represented in person or by proxy.

We hope you will find it possible to attend this year's annual shareholder meeting and thank you for your continued interest in Duke Energy.

Sincerely,

   


GRAPHIC

   

Lynn J. Good

   

Vice Chairman, President and Chief Executive Officer

   

Table of Contents

PARTICIPATE IN THE FUTURE OF DUKE ENERGY;
CAST YOUR VOTE RIGHT AWAY

It is very important that you vote to play a part in the future of Duke Energy. New York Stock Exchange ("NYSE") rules state that if your shares are held through a broker, bank or other nominee, they cannot vote on your behalf on nondiscretionary matters.

Please cast your vote right away on all of the proposals listed below to ensure that your shares are represented.

Proposals That Require Your Vote


 
   
  More
information

  Board
recommendation

  Broker non-votes
  Abstentions
  Votes
required
for approval

 
PROPOSAL 1   Election of directors   Page 15   FOR each nominee   Do not count   Do not count   Majority of votes cast, with a resignation policy

 

PROPOSAL 2

 

Ratification of Deloitte & Touche LLP as Duke Energy Corporation's independent public accountant for 2014

 

Page 33

 

FOR

 

Vote for

 

Vote against

 

Majority of shares represented

 

PROPOSAL 3

 

Approval, on an advisory basis, of Duke Energy Corporation's named executive officer compensation

 

Page 35

 

FOR

 

Do not count

 

Vote against

 

Majority of shares represented

 

PROPOSAL 4

 

Approval of the amendment to Duke Energy Corporation's Amended and Restated Certificate of Incorporation to authorize shareholder action by less than unanimous written consent

 

Page 68

 

FOR

 

Vote against

 

Vote against

 

Majority of outstanding shares entitled to vote

 

PROPOSAL 5

 

Shareholder proposal regarding shareholder right to call a special shareholder meeting

 

Page 69

 

AGAINST

 

Do not count

 

Vote against

 

Majority of shares represented

 

PROPOSAL 6

 

Shareholder proposal regarding political contribution disclosure

 

Page 71

 

AGAINST

 

Do not count

 

Vote against

 

Majority of shares represented

 

Vote Right Away


Even if you plan to attend this year's meeting, it is a good idea to vote your shares now, before the meeting, in the event your plans change. Whether you vote by Internet, by telephone or by mail, please have your proxy card or voting instruction form in hand and follow the instructions.

 

By Internet using your computer
 
By telephone
  By mailing your
proxy card


GRAPHIC

 


GRAPHIC

 


GRAPHIC

Visit 24/7
www.proxyvote.com

 

Dial toll-free 24/7
1-800-690-6903
or by calling the
number provided
by your broker, bank
or other nominee if your shares are not registered in your name.

 

Cast your ballot,
sign your proxy card
and send free of postage.
 

DUKE ENERGY – 2014 Proxy Statement    3


Back to Contents

PARTICIPATE IN THE FUTURE OF DUKE ENERGY;
CAST YOUR VOTE RIGHT AWAY

Visit Our Website



GRAPHIC

Visit our website
http://www.duke-energy.com/investors/news-events.asp
 

Review and download this proxy statement and our annual report

Listen to a live audio stream of the meeting

Attend Our 2014 Annual Shareholder Meeting




GRAPHIC

 

10:00 a.m. (EST) on Thursday, May 1, 2014
O.J. Miller Auditorium
526 South Church Street
Charlotte, NC 28202
  
Directions to 526 South Church Street are provided on the inside back cover.
  
GRAPHIC  526 South Church Street
GRAPHIC  Mint Street Parking Deck
GRAPHIC  Bank of America Stadium

4    DUKE ENERGY – 2014 Proxy Statement


Table of Contents

Table of Contents

NOTICE OF ANNUAL SHAREHOLDER MEETING   10
 

FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL SHAREHOLDER MEETING

 

11
 

PROPOSAL 1:

 

ELECTION OF DIRECTORS

 

15
 

INFORMATION ON THE BOARD OF DIRECTORS

 

21
 

REPORT OF THE CORPORATE GOVERNANCE COMMITTEE

 

26
 

DIRECTOR COMPENSATION

 

29
 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

31
 

PROPOSAL 2:

 

RATIFICATION OF DELOITTE & TOUCHE LLP AS DUKE ENERGY CORPORATION'S INDEPENDENT PUBLIC ACCOUNTANT FOR 2014

 

33
 

REPORT OF THE AUDIT COMMITTEE

 

34
 

PROPOSAL 3:

 

ADVISORY VOTE TO APPROVE DUKE ENERGY CORPORATION'S NAMED EXECUTIVE OFFICER COMPENSATION

 

35
 

REPORT OF THE COMPENSATION COMMITTEE

 

36
 

COMPENSATION DISCUSSION AND ANALYSIS

 

36
 

EXECUTIVE COMPENSATION

 

52
 

PROPOSAL 4:

 

AMENDMENT TO DUKE ENERGY CORPORATION'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO AUTHORIZE SHAREHOLDER ACTION BY LESS THAN UNANIMOUS WRITTEN CONSENT

 

68
 

SHAREHOLDER PROPOSALS

 

69
 

PROPOSAL 5:

 

SHAREHOLDER PROPOSAL REGARDING SHAREHOLDER RIGHT TO CALL A SPECIAL SHAREHOLDER MEETING

 

69
 

PROPOSAL 6:

 

SHAREHOLDER PROPOSAL REGARDING POLITICAL CONTRIBUTION DISCLOSURE

 

71
 

OTHER INFORMATION

 

73
 

APPENDIX A

 

75
 

APPENDIX B

 

76
 

APPENDIX C

 

77
 

DUKE ENERGY – 2014 Proxy Statement    5


Table of Contents

This proxy statement was first made available to shareholders on or about March 20, 2014.

Proxy Summary

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider. You should read the entire proxy statement carefully before voting. Page references ("XX") are supplied to help you find further information in this proxy statement.

Eligibility to Vote (page 11)

You can vote if you were a shareholder of record at the close of business on March 3, 2014.

How to Cast Your Vote (page 12)

You can vote by any of the following methods:

                 
By Internet using your
computer

  By telephone
  By mailing your
proxy card

  In person
   

 

 

 

 

 

 

 

 

 
GRAPHIC
Visit 24/7
www.proxyvote.com
  GRAPHIC
Dial toll-free 24/7
1-800-690-6903
or by calling the
number provided
by your broker, bank
or other nominee if your shares are not registered in your name.
  GRAPHIC
Cast your ballot, sign
your proxy card and
send free of postage.
  At the annual shareholder meeting: If you are a shareholder of record, you may be admitted to the meeting by bringing your notice, proxy card or, if your shares are held in the name of a broker, bank or other nominee, an account statement or letter from the nominee indicating your ownership as of the record date, along with some form of government-issued identification.    
                 

Business Highlights

Duke Energy's regulated utility operations provide electricity to 7.2 million customers located in six states in the Southeast and Midwest United States, representing a population of approximately 22 million people. Our nonregulated businesses own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States. Duke Energy operates in the United States, primarily through its direct and indirect wholly owned subsidiaries, Duke Energy Carolinas, LLC; Duke Energy Progress, Inc.; Duke Energy Florida, Inc.; Duke Energy Ohio, Inc.; Duke Energy Kentucky, Inc.; and Duke Energy Indiana, Inc., as well as in Latin America through Duke Energy International, LLC.

Governance of the Company (page 21)

Board Leadership Structure

Meeting Attendance

Risk Oversight

Director Independence

Committees and Attendance

Director Qualification Standards

Criteria for Board Membership

Majority Vote Standard

Communications with Directors

 

6    DUKE ENERGY – 2014 Proxy Statement


Table of Contents

Board Nominees (page 15)

 
   
   
   
  Independent (Yes/No)    
   
 
   
  Director
since

   
  Committee
Memberships

  Other Public
Company Boards

Name
  Age
  Occupation
  Yes
  No
 

G. Alex Bernhardt, Sr.

    70     1991   Chairman, Bernhardt Furniture Company   X      

Nuclear Oversight

Regulatory Policy and Operations

  None
 

Michael G. Browning

    67     1990   Chairman, Browning Investments, Inc.   X      

Audit

Corporate Governance

Finance and Risk Management

  None
 

Harris E. DeLoach, Jr.

    69     2006   Executive Chairman, Sonoco Products Company   X      

Corporate Governance

Nuclear Oversight

 

Sonoco Products Company

Goodrich Corporation

 

Daniel R. DiMicco

    63     2007   Retired Chairman, President and Chief Executive Officer, Nucor Corporation   X      

Corporate Governance

Nuclear Oversight

  None
 

John H. Forsgren

    67     2009   Retired Vice Chairman, Executive Vice President and Chief Financial Officer, Northeast Utilities   X      

Finance and Risk Management

Nuclear Oversight

 

The Phoenix Companies, Inc.

 

Lynn J. Good
Vice Chairman

    54     2013   Vice Chairman, President and Chief Executive Officer, Duke Energy Corporation       X   None  

Hubbell Incorporated

 

Ann M. Gray
Chairman of the Board

    68     1994   Former Vice President, ABC, Inc. and former President, Diversified Publishing Group, ABC, Inc.   X      

Compensation

Corporate Governance

Finance and Risk Management

 

The Phoenix Companies, Inc.

 

James H. Hance, Jr.

    69     2005   Retired Vice Chairman and Chief Financial Officer, Bank of America Corporation   X      

Audit

Compensation

Finance and Risk Management

 

Cousins Properties Incorporated

Ford Motor Company

The Carlyle Group,  LP

 

John T. Herron

    60     2013   Retired President, Chief Executive Officer and Chief Nuclear Officer, Entergy Nuclear   X      

Nuclear Oversight

Regulatory Policy and Operations

  None
 

James B. Hyler, Jr.

    66     2008   Managing Director, Investors Management Corporation   X      

Audit

Finance and Risk Management

Regulatory Policy and Operations

  None
 

William E. Kennard

    57     2014   Senior Advisor, Grain Management   X      

Finance and Risk Management

 

MetLife,  Inc.

 

E. Marie McKee

    63     1999   President, Corning Museum of Glass   X      

Audit

Compensation

Corporate Governance

  None
 

E. James Reinsch

    70     2009   Retired Senior Vice President and Partner, Bechtel Group and past President, Bechtel Nuclear   X      

Finance and Risk Management

Nuclear Oversight

  None
 

James T. Rhodes

    72     2001   Retired Chairman, President and Chief Executive Officer, Institute of Nuclear Power Operations   X      

Nuclear Oversight

Regulatory Policy and Operations

  None
 

Carlos A. Saladrigas

    65     2001   Chairman, Regis HR Group, Concordia Healthcare Holdings, LLC   X      

Audit

Compensation

Regulatory Policy and Operations

 

Advance Auto Parts,  Inc.

 

 

DUKE ENERGY – 2014 Proxy Statement    7


Table of Contents

Named Executive Officers (page 36)

Name
  Age
  Occupation
  Since
  Previous occupation
 

Lynn J. Good

   

54

 

Vice Chairman, President and Chief Executive Officer

   

2013

 

Chief Financial Officer of Duke Energy from July 2009 through June 2013; President, Commercial Businesses of Duke Energy from November 2007 through June 2009

 

Steven K. Young

   

55

 

Executive Vice President and Chief Financial Officer

   

2013

 

Vice President, Chief Accounting Officer and Controller of Duke Energy from July 2012 until August 2013; Senior Vice President and Controller of Duke Energy from December 2006 until July 2012

 

Marc E. Manly

   

62

 

Executive Vice President and President, Commercial Businesses

   

2012

 

Chief Legal Officer of Duke Energy from April 2006 until December 2012

 

Dhiaa M. Jamil

   

57

 

Executive Vice President and President, Duke Energy Nuclear

   

2013

 

Chief Nuclear Officer of Duke Energy from 2008 until March 2013; Chief Generation Officer of Duke Energy from July 2009 until March 2013; Senior Vice President, Nuclear Support of Duke Energy Carolinas, LLC from January 2007 to February 2008

 

Lloyd M. Yates

   

53

 

Executive Vice President, Regulated Utilities

   

2012

 

Executive Vice President, Customer Operations of Duke Energy from July 2012 until December 2012; President and Chief Executive Officer of Duke Energy Progress, Inc. from July 2007 until June 2012

 
*
Other Named Executive Officers include James E. Rogers, President and Chief Executive Officer of Duke Energy until June 30, 2013, and Chairman of the Board until his retirement on December 31, 2013.

Executive Compensation (page 36)

Principles and Objectives (page 36)

Our executive compensation program is designed to:

Link pay to performance

Attract and retain talented executive officers and key employees

Emphasize performance-based compensation to motivate executives and key employees

Reward individual performance

Encourage long-term commitment to Duke Energy and align the interests of executives with shareholders

We meet these objectives through the appropriate mix of compensation, including:

Base salary

Short-term incentives

Long-term incentives

 

8    DUKE ENERGY – 2014 Proxy Statement


Table of Contents

2013 Executive Total Compensation Mix (page 37)

GRAPHIC

Independent Public Accountant (page 33)

As a matter of good corporate governance, we are asking our shareholders to ratify the selection of Deloitte & Touche LLP as our independent public accountant for 2014.

Voting Matters (page 11)

 
  Board Vote
Recommendation

  Page Reference
(for more detail)

 
   
Management Proposals              
   
Election of Directors     FOR each nominee     15  
   
Ratification of Deloitte & Touche LLP as Duke Energy Corporation's independent public accountant for 2014     FOR     33  
   
Approval, on an advisory basis, of Duke Energy Corporation's named executive officer compensation     FOR     35  
   
Amendment to Duke Energy Corporation's Amended and Restated Certificate of Incorporation to authorize shareholder action by less than unanimous written consent     FOR     68  
   
Shareholder Proposals              
   
Shareholder proposal regarding shareholder right to call a special shareholder meeting     AGAINST     69  
   
Shareholder proposal regarding political contribution disclosure     AGAINST     71  
   

 

DUKE ENERGY – 2014 Proxy Statement    9


Table of Contents

GRAPHIC


 

 

Notice of Annual Shareholder
Meeting

 

 

 

May 1, 2014

10:00 a.m.
O.J. Miller Auditorium
526 South Church Street
Charlotte, North Carolina 28202

We will convene the annual shareholder meeting of Duke Energy Corporation on Thursday, May 1, 2014, at 10:00 a.m. in the O.J. Miller Auditorium located at 526 South Church Street in Charlotte, North Carolina.

The purpose of the annual meeting is to consider and take action on the following:

1.
Election of directors;
2.
Ratification of Deloitte & Touche LLP as Duke Energy Corporation's independent public accountant for 2014;
3.
Approval, on an advisory basis, of Duke Energy Corporation's named executive officer compensation;
4.
Amendment to Duke Energy Corporation's Amended and Restated Certificate of Incorporation to authorize shareholder action by less than unanimous written consent;
5.
A shareholder proposal regarding shareholder right to call a special shareholder meeting;
6.
A shareholder proposal regarding political contribution disclosure; and
7.
Any other business that may properly come before the meeting (or any adjournment or postponement of the meeting).

Shareholders of record as of the close of business on March 3, 2014, are entitled to vote at the annual shareholder meeting. It is important that your shares are represented at this meeting.

This year we will again be using the Securities and Exchange Commission ("SEC") rule that allows us to provide our proxy materials to our shareholders via the Internet. By doing so, most of our shareholders will only receive a notice containing instructions on how to access the proxy materials via the Internet and vote online, by telephone or by mail. If you would like to request paper copies of the proxy materials, you may follow the instructions on the notice. If you receive paper copies of the proxy materials, we ask you to consider signing up to receive these materials electronically in the future by following the instructions contained in this proxy statement. By delivering proxy materials electronically, we can reduce the consumption of natural resources and the cost of printing and mailing our proxy materials.

Whether or not you expect to be present at the annual shareholder meeting, please take time to vote now. If you choose to vote by mail, you may do so by marking, dating and signing the proxy card and returning it to us. Please follow the voting instructions that are included on your proxy card. Regardless of the manner in which you vote, we urge and greatly appreciate your prompt response.

Dated: March 20, 2014   By order of the Board of Directors,

 

 


GRAPHIC
    Julie S. Janson
Executive Vice President, Chief Legal Officer and Corporate Secretary

10    DUKE ENERGY – 2014 Proxy Statement


Table of Contents

FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL SHAREHOLDER MEETING

On what am I voting?


 
   
  More
information

  Board
recommendation

  Broker non-votes
  Abstentions
  Votes
required
for approval

 

PROPOSAL 1

 

Election of directors

 

Page 15

 

FOR each
nominee

 

Do not count

 

Do not count

 

Majority of votes cast, with a resignation policy

 

PROPOSAL 2

 

Ratification of Deloitte & Touche LLP as Duke Energy Corporation's independent public accountant for 2014

 

Page 33

 

FOR

 

Vote for

 

Vote against

 

Majority of
shares
represented

 

PROPOSAL 3

 

Approval, on an advisory basis, of Duke Energy Corporation's named executive officer compensation

 

Page 35

 

FOR

 

Do not count

 

Vote against

 

Majority of
shares
represented

 

PROPOSAL 4

 

Amendment to Duke Energy Corporation's Amended and Restated Certificate of Incorporation to authorize shareholder action by less than unanimous written consent

 

Page 68

 

FOR

 

Vote against

 

Vote against

 

Majority of
outstanding shares
entitled to vote

 

PROPOSAL 5

 

Shareholder proposal regarding shareholder right to call a special shareholder meeting

 

Page 69

 

AGAINST

 

Do not count

 

Vote against

 

Majority of
shares
represented

 

PROPOSAL 6

 

Shareholder proposal regarding political contribution disclosure

 

Page 71

 

AGAINST

 

Do not count

 

Vote against

 

Majority of
shares
represented

 

Who can vote?


Holders of Duke Energy's common stock as of the close of business on the record date, March 3, 2014, are entitled to vote, either in person or by proxy, at the annual shareholder meeting. Each share of Duke Energy common stock has one vote.

DUKE ENERGY – 2014 Proxy Statement    11


Back to Contents

FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL SHAREHOLDER MEETING

How do I vote?


By Proxy – Before the annual shareholder meeting, you can give a proxy to vote your shares of Duke Energy common stock in one of the following ways:

           
           
  By Internet using your computer
  By telephone
  By mailing your proxy card
 
GRAPHIC
 
GRAPHIC
 
GRAPHIC

 

Visit 24/7
www.proxyvote.com

 

Dial toll-free 24/7
1-800-690-6903
or by calling the
number provided
by your broker, bank
or other nominee if your shares
are not registered in your name.

 

Cast your ballot,
sign your proxy card
and send free of postage.
           

The telephone and Internet voting procedures are designed to confirm your identity, to allow you to give your voting instructions and to verify that your instructions have been properly recorded. If you wish to vote by telephone or Internet, please follow the instructions that are included on your notice.

If you mail us your properly completed and signed proxy card or vote by telephone or Internet, your shares of Duke Energy common stock will be voted according to the choices that you specify. If you sign and mail your proxy card without marking any choices, your proxy will be voted:

FOR the election of all nominees for director;

FOR the ratification of Deloitte & Touche LLP as Duke Energy's independent public accountant for 2014;

FOR the approval, on an advisory basis, of Duke Energy's named executive officer compensation;

FOR the approval of the amendment to Duke Energy Corporation's Amended and Restated Certificate of Incorporation to authorize shareholder action by less than unanimous written consent;

AGAINST the shareholder proposal regarding shareholder right to call a special shareholder meeting; and

AGAINST the shareholder proposal regarding political contribution disclosure.

We do not expect that any other matters will be brought before the annual shareholder meeting. However, by giving your proxy, you appoint the persons named as proxies as your representatives at the annual shareholder meeting.

In Person – You may come to the annual shareholder meeting and cast your vote there. You may be admitted to the meeting by bringing your notice, proxy card or, if your shares are held in the name of your broker, bank or other nominee, you must bring an account statement or letter from the nominee indicating that you were the owner of the shares on March 3, 2014, along with some form of government-issued identification.

May I change or revoke my vote?


Yes. You may change your vote or revoke your proxy at any time prior to the annual shareholder meeting by:

notifying Duke Energy's Corporate Secretary in writing that you are revoking your proxy;

providing another signed proxy that is dated after the proxy you wish to revoke;

using the telephone or Internet voting procedures; or

attending the annual shareholder meeting and voting in person.

Will my shares be voted if I do not provide my proxy?


It depends on whether you hold your shares in your own name or in the name of a bank or brokerage firm. If you hold your shares directly in your own name, they will not be voted unless you provide a proxy or vote in person at the meeting.

Brokerage firms generally have the authority to vote their customers' unvoted shares on certain "routine" matters. If your shares are held in the name of a broker, bank or other nominee, such nominee can vote your shares for the ratification of Deloitte & Touche LLP as Duke Energy's independent public accountant for 2014 if you do not timely provide your proxy because this matter is considered "routine" under the applicable rules. However, no other items are considered "routine" and may not be voted by your broker without your instruction.

12    DUKE ENERGY – 2014 Proxy Statement


Back to Contents

FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL SHAREHOLDER MEETING

If I am a participant in the Duke Energy Retirement Savings Plan or the Savings Plan for Employees of Florida Progress Corporation, how do I vote shares held in my plan account?


If you are a participant in either of the plans listed above, you have the right to provide voting directions to the plan trustee, by submitting your proxy card, for those shares of Duke Energy common stock that are held by the plan and allocated to your account. Plan participant proxies are treated confidentially.

If you elect not to provide voting directions to the plan trustee, the plan trustee will vote the Duke Energy shares allocated to your plan account in the same proportion as those shares held by the plan for which the plan trustee has received voting directions from other plan participants. The plan trustee will follow participants' voting directions and the plan procedure for voting in the absence of voting directions, unless it determines that to do so would be contrary to the Employee Retirement Income Security Act of 1974.

The plan trustee for each of the respective plans is as follows:

Duke Energy Retirement Savings Plan – Fidelity Management Trust Company

Savings Plan for Employees of Florida Progress Corporation – Vanguard Fiduciary Trust Company

Because the plan trustee must process voting instructions from participants before the date of the annual shareholder meeting, you must deliver your instructions no later than April 28, 2014, at 11:59 p.m.

What constitutes a quorum?


As of the record date, 706,954,889 shares of Duke Energy common stock were issued and outstanding and entitled to vote at the annual shareholder meeting. In order to conduct the annual shareholder meeting, a majority of the shares entitled to vote must be present in person or by proxy. This is referred to as a "quorum." If you submit a properly executed proxy card or vote by telephone or on the Internet, you will be considered part of the quorum. Abstentions and broker "non-votes" will be counted as present and entitled to vote for purposes of determining a quorum. A broker "non-vote" is not, however, counted as present and entitled to vote for purposes of voting on individual proposals other than ratification of Deloitte & Touche LLP as Duke Energy's independent public accountant. A broker "non-vote" occurs when a bank, broker or other nominee who holds shares for another person has not received voting instructions from the owner of the shares and, under NYSE listing standards, does not have discretionary authority to vote on a matter.

What vote is needed to approve the matters submitted?


Election of directors. Directors are elected by a majority of the votes cast at the meeting. Abstentions and broker non-votes will have no effect on the outcome of the vote for this proposal. If any nominee does not receive a majority of "FOR" votes, such nominee is required to submit his or her resignation for consideration by the Board of Directors.

Ratification of Deloitte & Touche LLP as Duke Energy's independent public accountant for 2014. The affirmative vote of a majority of the shares present and entitled to vote at the annual shareholder meeting is required to approve this proposal. Abstentions will have the same effect as votes against this proposal. Broker non-votes will have the same effect as votes for this proposal.

Approval, on an advisory basis, of Duke Energy's named executive officer compensation. The affirmative vote of a majority of shares present and entitled to vote at the annual shareholder meeting is required to approve this proposal. Abstentions will have the same effect as votes against this proposal. Broker non-votes will have no effect on the outcome of the vote for this proposal.

Approval of the amendment to Duke Energy Corporation's Amended and Restated Certificate of Incorporation to authorize shareholder action by less than unanimous written consent. The affirmative vote of a majority of outstanding shares entitled to vote at the annual shareholder meeting is required to approve this proposal. Abstentions will have the same effect as votes against this proposal. Broker non-votes will have the same effect as votes against this proposal.

Shareholder proposal regarding shareholder right to call a special shareholder meeting. The affirmative vote of a majority of the shares present and entitled to vote at the annual shareholder meeting is required to approve this proposal. Abstentions will have the same effect as votes against this proposal. Broker non-votes will have no effect on the outcome of the vote for this proposal.

Shareholder proposal regarding political contribution disclosure. The affirmative vote of a majority of the shares present and entitled to vote at the annual shareholder meeting is required to approve this proposal. Abstentions will have the same effect as votes against this proposal. Broker non-votes will have no effect on the outcome of the vote for this proposal.

DUKE ENERGY – 2014 Proxy Statement    13


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FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL SHAREHOLDER MEETING

Who conducts the proxy solicitation and how much will it cost?


Duke Energy is requesting your proxy for the annual shareholder meeting and will pay all the costs of requesting shareholder proxies. We have hired Georgeson Inc. to help us send out the proxy materials and request proxies. Georgeson's fee for these services is $21,000, plus out-of-pocket expenses. We can request proxies through the mail or personally by telephone, fax or Internet. We can use directors, officers and other employees of Duke Energy to request proxies. Directors, officers and other employees will not receive additional compensation for these services. We will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding solicitation material to the beneficial owners of Duke Energy common stock.

14    DUKE ENERGY – 2014 Proxy Statement


Table of Contents

PROPOSAL 1:     ELECTION OF DIRECTORS

The Board of Directors


The Board of Directors of Duke Energy has nominated the following 15 candidates to serve on the Board. We have a declassified Board of Directors, which means all of the directors are voted on every year at the annual shareholder meeting.

If any director is unable to stand for election, the Board of Directors may reduce the number of directors or designate a substitute. In that case, shares represented by proxies may be voted for a substitute director. We do not expect that any nominee will be unavailable or unable to serve. The Corporate Governance Committee, comprised of only independent directors, has recommended the following current directors as nominees for director and the Board of Directors has approved their nomination for election. Two of our current directors, Messrs. Barnet and Sharp, will be retiring at our 2014 Annual Shareholder Meeting and therefore are not nominated for re-election.

GRAPHIC

DUKE ENERGY – 2014 Proxy Statement    15


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PROPOSAL 1:    ELECTION OF DIRECTORS

G. Alex Bernhardt, Sr.

Independent Director Nominee        


GRAPHIC

 

Age: 70
Director of Duke Energy or its predecessor companies since 1991
Chairman, Bernhardt Furniture Company

  Skills and Qualifications:

Mr. Bernhardt's qualifications for election include his management experience and his knowledge and understanding of industry in Duke Energy's North Carolina service territory.

  Committees:

Nuclear Oversight Committee

Regulatory Policy and Operations Committee

Other current public directorships:

None


Mr. Bernhardt has been associated with Bernhardt Furniture Company, a furniture manufacturer, since 1965. He has served as Chairman since 1996 and a director since 1976. Previously he served as President from 1976 until 1996 and CEO from 1996 until 2011. Mr. Bernhardt is a director of Communities In Schools and a trustee of the North Carolina Nature Conservancy.

Michael G. Browning

Independent Director Nominee        


GRAPHIC

 

Age: 67
Director of Duke Energy or its predecessor companies since 1990
Chairman, Browning Investments, Inc.

  Skills and Qualifications:

Mr. Browning's qualifications for election include his management experience and his knowledge and understanding of Duke Energy's Midwest service territory. Mr. Browning's financial and investment background adds a valuable perspective to the Board and its committees.

  Committees:

Audit Committee

Corporate Governance Committee

Finance and Risk Management Committee

Other current public directorships:

None


Mr. Browning has been Chairman of Browning Investments, Inc., a real estate development firm, since 1981, and served as President from 1981 until 2013. He also serves as owner, general partner or managing member of various real estate entities. Mr. Browning is a former director of Standard Management Corporation, Conseco, Inc. and Indiana Financial Corporation.

Harris E. DeLoach, Jr.

Independent Director Nominee        


GRAPHIC

 

Age: 69
Director of Duke Energy or its predecessor companies since 2006
Executive Chairman,
Sonoco Products Company

  Skills and Qualifications:

Mr. DeLoach's qualifications for election include his knowledge of the economic and business development issues facing the communities we serve, his experience leading a public company with global operations and his understanding of Duke Energy's South Carolina service territory.

  Committees:

Corporate Governance Committee

Nuclear Oversight Committee

Other current public directorships:

Sonoco Products Company

Goodrich Corporation


Mr. DeLoach has served as Executive Chairman of Sonoco Products Company, a manufacturer of paperboard and paper and plastic packaging products, since March 2013. He previously served as Chief Executive Officer of Sonoco Products Company from July 2000 to March 2013. Mr. DeLoach has been Chairman of the Sonoco Products Board of Directors since April 2005. Prior to joining Sonoco Products in 1986, Mr. DeLoach was in private law practice and served as an outside counsel to Sonoco Products for 15 years.

16    DUKE ENERGY – 2014 Proxy Statement


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PROPOSAL 1:    ELECTION OF DIRECTORS

Daniel R. DiMicco

Independent Director Nominee        


GRAPHIC

 

Age: 63
Director of Duke Energy or its predecessor companies since 2007
Retired Chairman, President and Chief Executive Officer,
Nucor Corporation

  Skills and Qualifications:

Mr. DiMicco's qualifications for election include his management experience, including Chief Executive Officer of a Fortune 500 company and successfully operating a company serving many constituencies. In addition, Mr. DiMicco's experience as Chief Executive Officer of a large industrial corporation provides a valuable perspective on Duke Energy's industrial customer class.

  Committees:

Corporate Governance Committee

Nuclear Oversight Committee

Other current public directorships:

None


Mr. DiMicco has served as Chairman Emeritus of Nucor Corporation, a steel company, since December 2013. From January 2013 until December 2013, Mr. DiMicco served as Executive Chairman of Nucor Corporation and as Chairman from May 2006 to December 2012, Chief Executive Officer from September 2000 to December 2012 and President from September 2000 to December 2010. He was a member of the Nucor Board of Directors from 2000 to 2013. Mr. DiMicco is a former chair of the American Iron and Steel Institute.

John H. Forsgren

Independent Director Nominee        


GRAPHIC

 

Age: 67
Director of Duke Energy or its predecessor companies since 2009
Retired Vice Chairman, Executive Vice President and Chief Financial Officer, Northeast Utilities

  Skills and Qualifications:

Mr. Forsgren's qualifications for election include his prior management and financial experience as Vice Chairman and Chief Financial Officer of a large utility company and his extensive knowledge of the energy industry and insight on renewable energy.

  Committees:

Finance and Risk Management Committee

Nuclear Oversight Committee

Other current public directorships:

The Phoenix Companies, Inc.


Mr. Forsgren has been Chairman of The Phoenix Companies, Inc. since 2013 and was Vice Chairman, Executive Vice President and Chief Financial Officer of Northeast Utilities from 1996 until his retirement in 2004. He is a former director of CuraGen Corporation and Neon Communications Group, Inc.

Lynn J. Good

Non-Independent Director Nominee
Vice Chairman of the Board
       


GRAPHIC

 

Age: 54
Director of Duke Energy or its predecessor companies since 2013
Vice Chairman, President and Chief Executive Officer, Duke Energy Corporation

  Skills and Qualifications:

Ms. Good's qualifications for election include her experience as Chief Executive Officer and Chief Financial Officer of Duke Energy, her knowledge of the affairs of Duke Energy and its businesses, and her experience in the energy industry.

  Committees:

None

Other current public directorships:

Hubbell Incorporated


Ms. Good has served as Vice Chairman, President, Chief Executive Officer and a member of the Board of Directors of Duke Energy since July 2013. She served as Executive Vice President and Chief Financial Officer of Duke Energy from July 2009 through June 2013. Prior to that she served as President, Commercial Businesses from November 2007 through June 2009.

DUKE ENERGY – 2014 Proxy Statement    17


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PROPOSAL 1:    ELECTION OF DIRECTORS


Ann M. Gray

Independent Director Nominee
Chairman of the Board
       


GRAPHIC

 

Age: 68
Director of Duke Energy or its predecessor companies since 1994
Former Vice President, ABC, Inc. and former President, Diversified Publishing Group, ABC, Inc.

  Skills and Qualifications:

Ms. Gray's qualifications for election include her business experience, both from a management perspective and as a result of her experience as a director at several public companies. Ms. Gray's public company experience has also given her in-depth knowledge of governance principles, which she utilizes on a variety of matters, including, among other things, succession planning, executive compensation and corporate governance.

  Committees:

Compensation Committee

Corporate Governance Committee

Finance and Risk Management Committee

Other current public directorships:

The Phoenix Companies, Inc.


Ms. Gray was President of Diversified Publishing Group of ABC, Inc., a television, radio and publishing company, from 1991 until 1997 and was a Corporate Vice President of ABC, Inc. and its predecessors from 1979 to 1998. Ms. Gray is a former director of Elan Corporation, plc and former trustee of JPMorgan Funds.

James H. Hance, Jr.

Independent Director Nominee        


GRAPHIC

 

Age: 69
Director of Duke Energy or its predecessor companies since 2005
Retired Vice Chairman and Chief Financial Officer, Bank of America Corporation

  Skills and Qualifications:

Mr. Hance's qualifications for election include his management and financial experience as Vice Chairman and Chief Financial Officer of one of our nation's largest financial institutions, his broad background as a director of a number of large financial and industrial corporations, and his expertise in finance.

  Committees:

Audit Committee

Compensation Committee

Finance and Risk Management Committee

Other current public directorships:

Cousins Properties Incorporated

Ford Motor Company

The Carlyle Group,  LP


Mr. Hance was Vice Chairman of Bank of America from 1994 until his retirement in 2005 and served as Chief Financial Officer from 1988 to 2004. Since retiring in 2005, Mr. Hance has served as a director for various public companies. He is a certified public accountant and spent 17 years with Price Waterhouse (now PricewaterhouseCoopers LLP). He is a former director of Bank of America, Rayonier Inc., Morgan Stanley and EnPro Industries, Inc. Mr. Hance also serves as an operating executive of The Carlyle Group, LP and is a member of its board of directors.

John T. Herron

Independent Director Nominee        


GRAPHIC

 

Age: 60
Director of Duke Energy or its predecessor companies since 2013
Retired President, Chief Executive Officer and Chief Nuclear Officer, Entergy Nuclear

  Skills and Qualifications:

Mr. Herron's qualifications for election include his knowledge and extensive insight gained at a variety of nuclear energy facilities over more than three decades, as well as his previous management experience in the energy industry.

  Committees:

Nuclear Oversight Committee

Regulatory Policy and Operations Committee

Other current public directorships:

None


Mr. Herron was President, Chief Executive Officer and Chief Nuclear Officer of Entergy Nuclear from 2009 until his retirement on March 31, 2013. Mr. Herron joined Entergy Nuclear in 2001 and held a variety of positions. He began his career in nuclear operations in 1979 and has held positions at a number of nuclear stations across the country. Mr. Herron is a director of Ontario Power Generation and also has served on the Institute of Nuclear Power Operations' board of directors.

18    DUKE ENERGY – 2014 Proxy Statement


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PROPOSAL 1:    ELECTION OF DIRECTORS


James B. Hyler, Jr.

Independent Director Nominee        


GRAPHIC

 

Age: 66
Director of Duke Energy or its predecessor companies since 2008
Managing Director, Investors Management Corporation

  Skills and Qualifications:

Mr. Hyler's qualifications for election include his understanding of Duke Energy's North Carolina service territory and his knowledge and expertise in financial services and corporate finance.

  Committees:

Audit Committee

Finance and Risk Management Committee

Regulatory Policy and Operations Committee

Other current public directorships:

None


Mr. Hyler is Managing Director of Investors Management Corporation, a firm which invests in and acquires companies in various industries, since December 2011. He retired as Vice Chairman and Chief Operating Officer of First Citizens Bank in 2008, having served in these positions from 1994 until 2008. Mr. Hyler was President of First Citizens Bank from 1988 to 1994, and was Chief Financial Officer of First Citizens Bank from 1980 to 1988. Prior to joining First Citizens Bank, Mr. Hyler was an auditor with Ernst & Young for 10 years. Mr. Hyler served as a director of First Citizens BancShares from 1988 until 2008.

William E. Kennard

Independent Director Nominee        


GRAPHIC

 

Age: 57
Director of Duke Energy or its predecessor companies since 2014
Senior Advisor, Grain Management

  Skills and Qualifications:

Mr. Kennard's qualifications for election include his considerable experience and knowledge of the regulatory arena as well as his financial knowledge and international perspective.

  Committees:

Finance and Risk Management Committee

Other current public directorships:

MetLife, Inc.


Mr. Kennard is Senior Advisor at Grain Management, a private equity firm, since October 2013. Prior to joining Grain Management, Mr. Kennard served as U.S. Ambassador to the European Union from 2009 to August 2013; Managing Director of The Carlyle Group from 2001 to 2009; and Chairman of the Federal Communications Commission from 1997 to 2001.

E. Marie McKee

Independent Director Nominee        


GRAPHIC

 

Age: 63
Director of Duke Energy or its predecessor companies since 1999
President, Corning Museum of Glass

  Skills and Qualifications:

Ms. McKee's qualifications for election include her experience in human resources, which provides her with a thorough knowledge of employment and compensation practices. Her experience as President of Steuben Glass has also given her excellent operating skills and understanding of financial matters.

  Committees:

Audit Committee

Compensation Committee

Corporate Governance Committee

Other current public directorships:

None


Ms. McKee is President of the Corning Museum of Glass since 1998, and she served as Senior Vice President of Human Resources at Corning Incorporated, a manufacturer of components for high-technology systems for consumer electronics, mobile emissions controls, telecommunications and life sciences, from 1996 to 2010. Ms. McKee has over 30 years of experience at Corning, where she held a variety of management positions with increasing levels of responsibility, including President of Steuben Glass.

DUKE ENERGY – 2014 Proxy Statement    19


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PROPOSAL 1:    ELECTION OF DIRECTORS

E. James Reinsch

Independent Director Nominee        


GRAPHIC

 

Age: 70
Director of Duke Energy or its predecessor companies since 2009
Retired Senior Vice President and Partner, Bechtel Group and past President, Bechtel Nuclear

  Skills and Qualifications:

Mr. Reinsch's qualifications for election include his management experience and extensive knowledge of the nuclear industry and construction business.

  Committees:

Finance and Risk Management Committee

Nuclear Oversight Committee

Other current public directorships:

None


Mr. Reinsch was Senior Vice President and Partner of Bechtel Group from 2003 to 2008 and past president of Bechtel Nuclear from 2000 until his retirement in 2009. He has served on the boards of several international nuclear energy organizations, including the International Nuclear Energy Academy. He has also served on the U.S. Department of Energy's Hydrogen and Fuel Cell Technical Advisory Committee.

James T. Rhodes

Independent Director Nominee        


GRAPHIC

 

Age: 72
Director of Duke Energy or its predecessor companies since 2001
Retired Chairman, President and Chief Executive Officer, Institute of Nuclear Power Operations

  Skills and Qualifications:

Dr. Rhodes' qualifications for election include his management experience as Chief Executive Officer of a large non-profit organization in the energy industry, as well as his in-depth knowledge of the energy and nuclear industry.

  Committees:

Nuclear Oversight Committee

Regulatory Policy and Operations Committee

Other current public directorships:

None


Dr. Rhodes was Chairman and Chief Executive Officer of the Institute of Nuclear Power Operations, a nonprofit corporation promoting safety, reliability and excellence in nuclear plant operation, from 1998 to 1999 and Chairman, President and Chief Executive Officer from 1999 until his retirement in 2001. He served as President and Chief Executive Officer of Virginia Electric & Power Company, a subsidiary of Dominion Resources, Inc., from 1989 until 1997. Dr. Rhodes is a former member of the Advisory Council for the Electric Power Research Institute.

Carlos A. Saladrigas

Independent Director Nominee        


GRAPHIC

 

Age: 65
Director of Duke Energy or its predecessor companies since 2001
Chairman, Regis HR Group, Concordia Healthcare Holdings, LLC

  Skills and Qualifications:

Mr. Saladrigas' qualifications for election include his extensive expertise in the human resources, financial services and accounting arenas, as well as his understanding of Duke Energy's Florida service territory.

  Committees:

Audit Committee

Compensation Committee

Regulatory Policy and Operations Committee

Other current public directorships:

Advance Auto Parts, Inc.


Mr. Saladrigas is Chairman of Regis HR Group, which offers a full suite of outsourced human resources services to small and mid-sized businesses. He has served in this position since July 2008. Mr. Saladrigas also serves as Chairman of Concordia Healthcare Holdings, LLC, which specializes in managed behavioral health, since January 2011. He served as Vice Chairman, from 2007 to 2008, and Chairman, from 2002 to 2007, of Premier American Bank in Miami, Florida. Mr. Saladrigas served as Chief Executive Officer of ADP Total Source (previously the Vincam Group, Inc.) from 1984 to 2002.

The Board of Directors Recommends a Vote "FOR" Each Nominee.

20    DUKE ENERGY – 2014 Proxy Statement


Table of Contents

INFORMATION ON THE BOARD OF DIRECTORS

Our Board Leadership

Our Board of Directors is currently structured with an independent Chairman of the Board and a separate Vice Chairman who is also our President and Chief Executive Officer. On January 1, 2014, Ann Gray, previously the Company's independent lead director, became Chairman of the Board. Our President and Chief Executive Officer, Lynn Good, assumed the role of Vice Chairman in July 2013.

The Board of Directors believes that the Company and its shareholders are best served by the Board retaining discretion to determine the appropriate leadership structure for the Company based on what it believes is best for the Company at a particular point in time, including whether the same individual should serve as both Chief Executive Officer and Chairman of the Board, or whether the roles should be separate. In the event that the Board of Directors determines that the same individual should hold the positions of Chief Executive Officer and Chairman of the Board, the Company's Principles for Corporate Governance provide for an independent lead director to be appointed from among the independent directors.

Director Attendance

The Board of Directors of Duke Energy met 10 times during 2013 and has met 3 times so far in 2014. The overall attendance percentage for our directors was approximately 95% in 2013, and no director attended less than 75% of the total of the Board of Directors' meetings and the meetings of the committees upon which he or she served in 2013. Directors are encouraged to attend the annual shareholder meeting. All members of the Board of Directors attended Duke Energy's last annual shareholder meeting on May 2, 2013.

Risk Oversight

The Board of Directors is actively involved in the oversight of risks that could affect Duke Energy. This oversight is conducted primarily through the Finance and Risk Management Committee of the Board but also through the other committees of the Board, as appropriate. See below for descriptions of each of the committees. The Board and its committees, including the Finance and Risk Management Committee, satisfy its risk oversight responsibility through reports by each committee chair regarding the committee's considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within Duke Energy.

Independence of Directors

The Board of Directors may determine a director to be independent if the Board of Directors has affirmatively determined that the director has no material relationship with Duke Energy or its subsidiaries (references in this proxy statement to Duke Energy's subsidiaries shall mean its consolidated subsidiaries), either directly or as a shareholder, director, officer or employee of an organization that has a relationship with Duke Energy or its subsidiaries. Independence determinations are generally made on an annual basis at the time the Board of Directors approves director nominees for inclusion in the proxy statement and, if a director joins the Board of Directors in the interim, at such time.

The Board of Directors also considers its Standards for Assessing Director Independence, which set forth certain relationships between Duke Energy and directors and their immediate family members, or affiliated entities, that the Board of Directors, in its judgment, has deemed to be material or immaterial for purposes of assessing a director's independence. Duke Energy's Standards for Assessing Directors Independence are linked on our website at http://www.duke-energy.com/corporate-governance/board-of-directors/independence.asp. In the event a director has a relationship with Duke Energy that is not addressed in the Standards for Assessing Director Independence, the independent members of the Board of Directors determine whether such relationship is material.

The Board of Directors has determined that none of the directors, other than Ms. Good, has a material relationship with Duke Energy or its subsidiaries, and all are, therefore, independent under the listing standards of the NYSE and the rules and regulations of the SEC. In arriving at this determination, the Board of Directors considered all transactions and the materiality of any relationship with Duke Energy and its subsidiaries in light of all facts and circumstances.

DUKE ENERGY – 2014 Proxy Statement    21


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INFORMATION ON THE BOARD OF DIRECTORS

Board of Directors Committees

The Board of Directors has the six standing, permanent committees described below:

Audit Committee

8 meetings held in 2013

       Committee Members


PHOTO

 

Carlos A. Saladrigas, Chairperson
Michael G. Browning
James H. Hance, Jr.
James B. Hyler, Jr.
E. Marie McKee

Carlos A. Saladrigas

The Audit Committee selects and retains a firm of independent public accountants to conduct audits of the accounts of Duke Energy and its subsidiaries. It also reviews with the independent public accountant the scope and results of their audits, as well as the accounting procedures, internal controls, and accounting and financial reporting policies and practices of Duke Energy and its subsidiaries, and makes reports and recommendations to the Board of Directors as it deems appropriate. The Audit Committee is responsible for approving all audit and permissible non-audit services provided to Duke Energy by its independent public accountant. Pursuant to this responsibility, the Audit Committee adopted the policy on Engaging the Independent Auditor for Services, which provides that the Audit Committee will establish detailed services and related fee levels that may be provided by the independent public accountant and will review such policy annually. See page 33 for additional information on the Audit Committee's pre-approval policy.

The Board of Directors has determined that Mr. Saladrigas is an "audit committee financial expert" as such term is defined in Item 407(d)(5)(ii) of Regulation S-K. See page 20 for a description of his business experience.

Each of the members has been determined to be "independent" within the meaning of the NYSE's listing standards, Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the Company's Standards for Assessing Director Independence. In addition, each of the members meets the financial literacy requirements for audit committee membership under the NYSE's rules and the rules and regulations of the SEC.

Compensation Committee

9 meetings held in 2013

       Committee Members


PHOTO

 

E. Marie McKee, Chairperson
Ann M. Gray
James H. Hance, Jr.
Carlos A. Saladrigas

E. Marie McKee

The Compensation Committee establishes and reviews the overall compensation philosophy of the Company, reviews and approves the salaries and other compensation of certain employees, including all executive officers of Duke Energy, reviews and approves compensatory agreements with executive officers, approves equity grants and reviews the effectiveness of,

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INFORMATION ON THE BOARD OF DIRECTORS

Management's role in the compensation-setting process is to recommend compensation programs and assemble information as required by the committee. When establishing the compensation program for our named executive officers, the committee considers input and recommendations from management, including Ms. Good, who attends the Compensation Committee meetings.

This committee has engaged Frederic W. Cook & Company, Inc. as its independent compensation consultant. The compensation consultant generally attends each committee meeting and provides advice to the committee at the meetings, including reviewing and commenting on market compensation data used to establish the compensation of the executive officers and directors. The consultant has been instructed that it shall provide completely independent advice to the committee and is not permitted to provide any services to Duke Energy other than at the direction of the committee.

Each of the members of the Compensation Committee has been determined to be "independent" within the meaning of the NYSE's listing standards, Rule 10C-1(b) of the Exchange Act, and the Company's Standards for Assessing Director Independence; to be "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"); and, to be "non-employee directors" within the meaning of Rule 16b-3 of the Exchange Act.

Corporate Governance Committee

5 meetings held in 2013

    
  Committee Members


PHOTO

 

Ann M. Gray, Chairperson
Michael G. Browning
Harris E. DeLoach, Jr.
Daniel R. DiMicco
E. Marie McKee

Ann M. Gray

The Corporate Governance Committee considers matters related to corporate governance and formulates and periodically revises governance principles. It recommends the size and composition of the Board of Directors and its committees and recommends potential successors to the Chief Executive Officer. This committee also recommends to the Board of Directors the slate of nominees, including any nominees recommended by shareholders, for director for each year's annual meeting and, when vacancies occur, names of individuals who would make suitable directors of Duke Energy. This committee may engage an external search firm or a third party to identify or evaluate or to assist in identifying or evaluating a potential nominee. The committee also performs an annual evaluation of the performance of the Chief Executive Officer with input from the full Board of Directors.

Each of the members of the Corporate Governance Committee has been determined to be "independent" within the meaning of the NYSE's listing standards and the Company's Standards for Assessing Director Independence.

DUKE ENERGY – 2014 Proxy Statement    23


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INFORMATION ON THE BOARD OF DIRECTORS

Finance and Risk Management Committee

5 meetings held in 2013

    
  Committee Members


PHOTO

 

James H. Hance, Jr., Chairperson
William Barnet, III
Michael G. Browning
John H. Forsgren
Ann M. Gray
James B. Hyler, Jr.
William E. Kennard
E. James Reinsch

James H. Hance, Jr.

The Finance and Risk Management Committee is primarily responsible for the oversight of risk at the Company. This oversight function includes reviews of Duke Energy's financial and fiscal affairs and recommendations to the Board of Directors regarding dividends, financing and fiscal policies, and significant transactions. It reviews the financial exposure of Duke Energy, as well as mitigation strategies, reviews Duke Energy's risk exposure as related to overall company portfolio and impact on earnings, and reviews the financial impacts of major projects as well as capital expenditures.

Nuclear Oversight Committee

7 meetings held in 2013

    
  Committee Members


PHOTO

 

James T. Rhodes, Chairperson
G. Alex Bernhardt, Sr.
Harris E. DeLoach, Jr.
Daniel R. DiMicco
John H. Forsgren
John T. Herron
E. James Reinsch
Philip R. Sharp

James T. Rhodes

The Nuclear Oversight Committee provides oversight of the nuclear safety, operational performance and long-term plans and strategies of Duke Energy's nuclear power program. The oversight role is one of review, observation and comment and in no way alters management's authority, responsibility or accountability.

24    DUKE ENERGY – 2014 Proxy Statement


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INFORMATION ON THE BOARD OF DIRECTORS

Regulatory Policy and Operations Committee

6 meetings held in 2013

    
  Committee Members


PHOTO

 

Philip R. Sharp, Chairperson
William Barnet, III
G. Alex Bernhardt, Sr.
John T. Herron
James B. Hyler, Jr.
James T. Rhodes
Carlos A. Saladrigas

Philip R. Sharp

The Regulatory Policy and Operations Committee provides oversight of Duke Energy's regulatory strategy, including non-nuclear regulated utilities' operations; environmental, heath and safety issues; and, public policy positions.

Each committee operates under a written charter adopted by the Board of Directors. The charters are posted on our website at http://www.duke-energy.com/corporate-governance/board-committee-charters.asp.

BOARD OF DIRECTORS COMMITTEE MEMBERSHIP ROSTER (AS OF MARCH 20, 2014)

Name
  Audit
  Compensation
  Corporate
Governance

  Finance and Risk
Management

  Nuclear
Oversight

  Regulatory Policy and
Operations  

 

William Barnet, III

              X       X

G. Alex Bernhardt, Sr.

                  X   X

Michael G. Browning

  X       X   X        

Harris E. DeLoach, Jr.

          X       X    

Daniel R. DiMicco

          X       X    

John H. Forsgren

              X   X    

Lynn J. Good

                       

Ann M. Gray

      X    X*   X        

James H. Hance, Jr.

  X   X        X*        

John T. Herron

                  X   X

James B. Hyler, Jr.

  X           X       X

William E. Kennard

              X        

E. Marie McKee

  X    X*   X            

E. James Reinsch

              X   X    

James T. Rhodes

                   X*   X

Carlos A. Saladrigas

   X*   X               X

Philip R. Sharp

                  X    X*
 
*
Committee Chair

DUKE ENERGY – 2014 Proxy Statement    25


Table of Contents

REPORT OF THE CORPORATE GOVERNANCE COMMITTEE

The following is the report of the Corporate Governance Committee with respect to its philosophy, responsibilities and initiatives.

Philosophy and Responsibilities

We believe that sound corporate governance has three components: (i) Board of Directors' independence, (ii) processes and practices that foster solid decision-making by both management and the Board of Directors, and (iii) balancing the interests of all of our stakeholders – our investors, customers, employees, the communities we serve and the environment. The Corporate Governance Committee's charter is available on our website at http://www.duke-energy.com/corporate-governance/board-committee-charters/corporate-governance.asp and is summarized below.

Membership. The Committee must be comprised of three or more members, all of whom must qualify as independent directors under the listing standards of the NYSE and other applicable rules and regulations.

Responsibilities. The Committee's responsibilities include, among other things: (i) implementing policies regarding corporate governance matters; (ii) assessing the Board of Directors' membership needs and recommending nominees; (iii) recommending to the Board of Directors those directors to be selected for membership on, or removal from, the various Board of Directors' committees and those directors to be designated as chairs of Board of Directors' committees; and (iv) sponsoring and overseeing performance evaluations for the various Board of Directors' committees, the Board of Directors as a whole, and the directors and management, including the Chief Executive Officer.

Investigations and Evaluations. The Committee may conduct or authorize investigations into or studies of matters within the scope of the Committee's duties and responsibilities, and may retain, at the Company's expense, and in the Committee's sole discretion, consultants to assist in such work as the Committee deems necessary. In addition, the Committee has the sole authority to retain or terminate any search firm to be used to identify director candidates, including sole authority to approve the search firm's fees and other retention terms, such fees to be borne by the Company. Finally, the Committee conducts an annual self-evaluation of its performance.

In connection with the settlement by the Company with the North Carolina Utilities Commission following the Company's merger with Progress Energy, Inc., the Committee assigned the responsibility to search for a successor to our former CEO, Mr. Rogers, as well as for two additional directors to join the Board, to the Leadership Development Committee of the Board of Directors. The Leadership Development Committee was a temporary committee formed solely for this purpose, however, so the Corporate Governance Committee has retained its responsibility to identify director candidates and for succession planning. The Leadership Development Committee was disbanded in December 2013 following the appointments of Ms. Good as CEO and Messrs. Herron and Kennard to the Board of Directors.

Governance Initiatives

All of our Board of Directors committee charters, as well as our Principles for Corporate Governance, Code of Business Ethics for Employees and Code of Business Conduct & Ethics for Directors are available on our website at http://www.duke-energy.com/investors/corporate-governance.asp. Any amendments to or waivers from our Code of Business Ethics for Employees with respect to executive officers or Code of Business Conduct & Ethics for Directors must be approved by the Board and will be posted on our website. During 2013 our Board of Directors held 5 executive sessions with independent directors only.

Director Candidates

Profile. We look for the following characteristics in any candidate for nomination to our Board of Directors:

fundamental qualities of intelligence, perceptiveness, good judgment, maturity, high ethics and standards, integrity and fairness;

a genuine interest in Duke Energy and a recognition that, as a member of the Board of Directors, one is accountable to the shareholders of Duke Energy, not to any particular interest group;

a background that includes broad business experience or demonstrates an understanding of business and financial affairs and the complexities of a large, multifaceted, global business organization;

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REPORT OF THE CORPORATE GOVERNANCE COMMITTEE

diversity among the existing Board members, including racial and ethnic background, gender, experiences, skills and qualifications;

present or former chief executive officer, chief operating officer, or substantially equivalent level executive officer of a highly complex organization such as a corporation, university or major unit of government, or a professional who regularly advises such organizations;

no conflict of interest or legal impediment which would interfere with the duty of loyalty owed to Duke Energy and its shareholders;

the ability and willingness to spend the time required to function effectively as a director;

compatibility and ability to work well with other directors and executives in a team effort with a view to a long-term relationship with Duke Energy as a director;

independent opinions and willingness to state them in a constructive manner; and,

willingness to become a shareholder of Duke Energy (within a reasonable time of election to the Board of Directors).

Nominees. The Committee may engage a third party from time to time to assist it in identifying and evaluating director-nominee candidates, in addition to current members of the Board of Directors standing for re-election. The Committee will provide the third party, based on the profile described above, the characteristics, skills and experiences that may complement those of our existing members. The third party will then provide recommendations for nominees with such attributes. The Committee considers nominees recommended by shareholders on a similar basis, taking into account, among other things, the profile criteria described above and the nominee's experiences and skills. In addition, the Committee considers the shareholder-nominee's independence with respect to both the Company and the recommending shareholder. All of the nominees on the proxy card are current members of our Board of Directors and were recommended by the Committee.

Shareholders interested in submitting nominees as candidates for election as directors must provide timely written notice to the Corporate Governance Committee, c/o Corporate Secretary, Duke Energy Corporation, P.O. Box 1321, Charlotte, NC 28201-1321. The notice must set forth, as to each person whom the shareholder proposes to nominate for election as director:

the name and address of the recommending shareholder(s), and the class and number of shares of capital stock of Duke Energy that are beneficially owned by the recommending shareholder(s);

a representation that the recommending shareholder(s) is a holder of record of stock of Duke Energy entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person(s) specified in the notice;

the name, age, business address and principal occupation and employment of the recommended nominee;

any information relevant to a determination of whether the recommended nominee meets the criteria for Board of Directors membership established by the Board of Directors and/or the Corporate Governance Committee;

any information regarding the recommended nominee relevant to a determination of whether the recommended nominee would be considered independent under the applicable NYSE rules and SEC rules and regulations;

a description of any business or personal relationship between the recommended nominee and the recommending shareholder(s), including all arrangements or understandings between the recommended nominee and the recommending shareholder(s) and any other person(s) (naming such person(s)) pursuant to which the nomination is to be made by the recommending shareholder(s);

a statement, signed by the recommended nominee, (1) verifying the accuracy of the biographical and other information about the nominee that is submitted with the recommendation, (2) affirming the recommended nominee's willingness to be a director, and (3) consenting to serve as a director if so elected;

if the recommending shareholder(s) has beneficially owned more than 5% of Duke Energy's voting stock for at least one year as of the date the recommendation is made, evidence of such beneficial ownership as specified in the rules and regulations of the SEC;

if the recommending shareholder(s) intends to solicit proxies in support of such recommended nominee, a representation to that effect; and

all other information relating to the recommended nominee that is required to be disclosed in solicitations for proxies in an election of directors pursuant to Regulation 14A under the Exchange Act, including, without limitation, information regarding (1) the recommended nominee's business experience; (2) the class and number of shares of capital stock of Duke Energy, if any, that are beneficially owned by the recommended nominee; and (3) material relationships or transactions, if any, between the recommended nominee and Duke Energy's management.

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REPORT OF THE CORPORATE GOVERNANCE COMMITTEE

Majority Voting for the Election of Directors

In response to substantial shareholder support for a shareholder proposal at the 2013 Annual Shareholder Meeting regarding majority voting for the election of directors, the Board of Directors adopted Amended and Restated By-Laws in October 2013 to provide for majority voting in uncontested director elections.

Under the Amended and Restated By-Laws, in an uncontested election at which a quorum is present, a Director will be elected if the number of shares voted "for" the Director's election exceeds the number of votes "withheld" from that Director's election. In addition, the Company continues to maintain a resignation policy, which requires an incumbent Director who receives more "withhold" votes than votes "for" his or her election to tender his or her letter of resignation for consideration by the Corporate Governance Committee of the Company's Board of Directors.

In contested elections, Directors will continue to be elected by plurality vote. For purposes of the Amended and Restated By-laws, a "contested election" is an election in which the number of nominees for director is greater than the number of directors to be elected.

Communications with Directors

Interested parties can communicate with any of our directors by writing to our Corporate Secretary at the following address:

Corporate Secretary

Duke Energy Corporation
P.O. Box 1321
Charlotte, NC 28201-1321

Interested parties can communicate with our independent Chairman of the Board by writing to the following address:

Chairman of The Board

c/o Corporate Secretary
Duke Energy Corporation
P.O. Box 1321
Charlotte, NC 28201-1321

Our Corporate Secretary will distribute communications to the Board of Directors, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communication. In that regard, the Duke Energy Board of Directors has requested that certain items that are unrelated to the duties and responsibilities of the Board of Directors be excluded, such as: spam; junk mail and mass mailings; service complaints; resumes and other forms of job inquiries; surveys; and business solicitations or advertisements. In addition, material that is unduly hostile, threatening, obscene or similarly unsuitable will be excluded. However, any communication that is so excluded remains available to any director upon request.

Corporate Governance Committee

Ann M. Gray (Chair)
Michael G. Browning
Harris E. DeLoach, Jr.
Daniel R. DiMicco
E. Marie McKee

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DIRECTOR COMPENSATION

Annual Retainer and Fees. During 2013, the retainer and meeting fees paid to our independent directors consisted of:

 
   
  Meeting Fees  
Type of Fee
  Fee (Other Than
for Meetings)
($)

  In-Person Attendance at
Meetings Held in Conjunction
With a Regular Board of Directors Meeting
($)

  In-Person Meetings Not
Held in Conjunction
With a Regular Board
of Directors Meeting
($)

  Telephonic
Participation
in Meetings
($)

 
   

Annual Board of Directors Retainer (Cash)

    75,000                    

Annual Board of Directors Retainer (Stock)

    125,000                    

Board of Directors Meeting Fees

          2,000     2,500     2,000  

Annual Board Chair Retainer

    100,000                    

Annual Lead Director Retainer (if applicable)

    75,000                    

Annual Audit Committee Chair Retainer

    25,000                    

Annual Chair Retainer (Other Committees)

    15,000                    

Audit Committee Meeting Fees

          3,000     2,500     2,000  

Nuclear Oversight Committee Meeting Fees

          4,000     2,500     2,000  

Other Committee Meeting Fees

          2,000     2,500     2,000  
   

The compensation program is the same as in effect at the end of 2012, except for the addition of the annual Board Chair retainer of $100,000, which became effective on December 10, 2013.

Annual Stock Retainer for 2013. In 2013, each eligible director received the portion of his or her annual retainer that was payable in stock in the form of fully-vested shares granted under the Duke Energy Corporation 2010 Long-Term Incentive Plan.

Deferral Plans and Stock Purchases. Directors may elect to receive all or a portion of their annual compensation, consisting of retainers and attendance fees, on a current basis, or defer such compensation under the Duke Energy Corporation Directors' Savings Plan (the "Directors' Savings Plan"). Deferred amounts are credited to an unfunded account, the balance of which is adjusted for the performance of phantom investment options, including the Duke Energy common stock fund, as elected by the director, and generally are paid when the director terminates his or her service from the Board of Directors. In connection with the merger with Progress Energy, Duke Energy assumed the Progress Energy, Inc. Non-Employee Director Deferred Compensation Plan (the "Deferred Compensation Plan") and the Progress Energy, Inc. Non-Employee Director Stock Unit Plan (the "Stock Unit Plan"), each of which was merged into the Directors' Savings Plan effective at the end of 2013. Under the Deferred Compensation Plan, the former Progress Energy directors were provided the opportunity to elect to defer their annual retainer and board attendance fees. Any deferred fees are deemed to be invested in stock units. The number of units in each account is adjusted from time to time to reflect the payment of dividends on the number of shares of stock represented by the units. Payments from the plan are made in cash upon termination of service. Under the Stock Unit Plan, the number of units in each account is adjusted from time to time to reflect the payment of dividends on the number of shares of stock represented by the units. Payments from the plan are made in cash upon termination of service.

Charitable Giving Program. The Duke Energy Foundation, independent of Duke Energy, maintains The Duke Energy Foundation Matching Gifts Program under which directors are eligible to request matching contributions of up to $5,000 per director per calendar year to qualifying institutions. In addition, Duke Energy maintains a Directors' Charitable Giving Program. Eligibility for this program has been frozen and Ms. Gray is the only current director who is eligible. Under this program, Duke Energy will make, upon the director's death, donations of up to $1,000,000 to charitable organizations selected by the director. Ms. Gray may request that donations be made under this program during her lifetime, in which case the maximum donation will be reduced on an actuarially-determined net present value basis. In 2013, no donations were made on behalf of Ms. Gray. In addition, Duke Energy made a $1,000 donation to the Red Cross in December 2013 on behalf of each of the independent directors.

Expense Reimbursement and Insurance. Duke Energy provides travel insurance to directors in the amount of $500,000, and reimburses directors for expenses reasonably incurred in connection with attendance and participation at Board of Directors and committee meetings and special functions.

Stock Ownership Guidelines. Outside directors are subject to stock ownership guidelines, which establish a target level of ownership of Duke Energy common stock (or common stock equivalents). Currently each independent director is required to own shares with a value equal to at least five times the annual Board of Directors cash retainer (i.e., an ownership level of $375,000) or retain 50% of his or her vested annual equity retainer. All independent directors were in compliance with the guidelines as of December 31, 2013.

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DIRECTOR COMPENSATION

The following table describes the compensation earned during 2013 by each individual who served as an independent director during 2013. Because Mr. Kennard joined the Board of Directors on January 1, 2014, he did not receive any compensation in 2013 and is not listed below.

Name
  Fees Earned
or Paid in Cash
($)(2)

  Stock
Awards
($)(3)

  Change in Pension Value
and Nonqualified Deferred
Compensation Earnings
($)(4)

  All Other
Compensation
($)(5)

  Total
($)

 
   

William Barnet, III

    128,000     125,000     0     6,412     259,412  

G. Alex Bernhardt, Sr.

    136,500     125,000     14,843     6,412     282,755  

Michael G. Browning

    159,500     125,000     0     6,412     290,912  

Harris E. DeLoach, Jr.

    151,500     125,000     0     5,412     281,912  

Daniel R. DiMicco

    141,000     125,000     0     1,412     267,412  

John H. Forsgren

    128,000     125,000     0     4,412     257,412  

Ann M. Gray

    254,500     125,000     0     6,412     385,912  

James H. Hance, Jr.

    160,000     125,000     0     6,412     291,412  

John T. Herron(1)

    141,000     146,291     0     1,385     288,676  

James B. Hyler, Jr.

    160,000     125,000     0     1,412     286,412  

E. Marie McKee

    164,000     125,000     0     6,412     295,412  

E. James Reinsch

    134,000     125,000     0     6,412     265,412  

James T. Rhodes

    160,500     125,000     0     6,412     291,912  

Carlos A. Saladrigas

    177,500     125,000     0     6,412     308,912  

Philip R. Sharp

    151,500     125,000     0     3,912     280,412  
   

(1)

Effective March 1, 2013, Mr. Herron was appointed to the Board of Directors of Duke Energy.

(2)

Messrs. Bernhardt, DeLoach, DiMicco, Hyler and Reinsch and Ms. Gray and Dr. Rhodes elected to defer $136,500; $151,500; $141,000; $80,000; $67,000; $254,500; and $80,250, respectively, of their 2013 cash compensation under the Directors' Savings Plan.

(3)

This column reflects the grant date fair value of the stock awards granted to each eligible director during 2013. The grant date fair value was determined in accordance with the accounting guidance for stock-based compensation. See Note 20 of the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2013 ("Annual Report") for an explanation of the assumptions made in valuing these awards. In May 2013, each sitting director on the Duke Energy Board received 1,672 shares of stock. In addition, Mr. Herron received a prorated portion of the 2012-13 annual stock retainer, amounting to 307 shares, upon joining the Board of Directors on March 1, 2013. Messrs. Bernhardt, DeLoach, DiMicco, Forsgren, Hyler, Reinsch and Saladrigas and Ms. Gray and Dr. Rhodes elected to defer their 2013-14 stock retainer of Duke Energy shares under the Directors' Savings Plan.

(4)

Reflects above-market interest earned on a grandfathered investment fund previously provided under a predecessor plan to the Directors' Savings Plan. Participants can no longer defer compensation into the grandfathered investment fund but continue to be credited with interest at the fixed rate on amounts previously deferred into such fund.

(5)

As described in the following table, All Other Compensation for 2013 includes a business travel accident insurance premium that was prorated among the directors based on their service on the Board of Directors during 2013, contributions made in the director's name to charitable organizations, and a residential thermostat device.

Name
  Business Travel
Accident
Insurance
($)

  Charitable
Contributions
($)

  Residential
Thermostat
Device
($)

  Total
($)

 
   

William Barnet, III

    162     6,000     250     6,412  

G. Alex Bernhardt, Sr.

    162     6,000     250     6,412  

Michael G. Browning

    162     6,000     250     6,412  

Harris E. DeLoach, Jr.

    162     5,000     250     5,412  

Daniel R. DiMicco

    162     1,000     250     1,412  

John H. Forsgren

    162     4,000     250     4,412  

Ann M. Gray

    162     6,000     250     6,412  

James H. Hance, Jr.

    162     6,000     250     6,412  

John T. Herron

    135     1,000     250     1,385  

James B. Hyler, Jr.

    162     1,000     250     1,412  

E. Marie McKee

    162     6,000     250     6,412  

E. James Reinsch

    162     6,000     250     6,412  

James T. Rhodes

    162     6,000     250     6,412  

Carlos A. Saladrigas

    162     6,000     250     6,412  

Philip R. Sharp

    162     3,500     250     3,912  
   

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table indicates the amount of Duke Energy common stock beneficially owned by the current directors, the executive officers listed in the Summary Compensation Table under Executive Compensation (referred to as the named executive officers), and all directors and executive officers as a group as of March 3, 2014.

Name or Identity of Group
  Total Shares
Beneficially Owned(1)

  Percent
of Class

 
   

William Barnet, III

    16,906     *  

G. Alex Bernhardt, Sr.

    43,013     *  

Michael G. Browning

    69,119     *  

Harris E. DeLoach, Jr.

    17,820     *  

Daniel R. DiMicco

    27,163     *  

John H. Forsgren

    10,235     *  

Lynn J. Good

    65,425     *  

Ann M. Gray

    37,641     *  

James H. Hance, Jr.

    34,671     *  

John T. Herron

    7,879     *  

James B. Hyler, Jr.

    5,912     *  

Dhiaa M. Jamil

    35,933     *  

William E. Kennard

    597     *  

Marc E. Manly

    16,560     *  

E. Marie McKee

    991     *  

E. James Reinsch

    17,011     *  

James T. Rhodes

    21,991     *  

James E. Rogers(2)

    1,087,080     *  

Carlos A. Saladrigas

    1,284     *  

Philip R. Sharp

    12,716     *  

Lloyd M. Yates

    47,237     *  

Steven K. Young

    37,595     *  

Directors and executive officers as a group (26)

    1,657,913     *  
   

*

Represents less than 1%.

(1)

Includes the following number of shares with respect to which directors and executive officers have the right to acquire beneficial ownership within sixty days of March 3, 2014: Mr. Barnet—123; Mr. Bernhardt—1,558; Mr. Browning—14,272; Mr. DeLoach—2,934; Mr. DiMicco—10,459; Mr. Forsgren—8,213; Ms. Good—0; Ms. Gray—432; Mr. Hance—0; Mr. Herron—0; Mr. Hyler—2,934; Mr. Jamil—0; Mr. Kennard—597; Mr. Manly—0; Ms. McKee—120; Mr. Reinsch—8,213; Dr. Rhodes—1,364; Mr. Rogers—42,834; Mr. Saladrigas—414; Dr. Sharp—0; Mr. Yates—6,606; Mr. Young—0; and all directors and executive officers as a group—104,246.

(2)

Provided as of the date of termination of retirement.

Ownership of Units Representing Common Stock

The table below shows ownership of other units (not listed in the table above) related to the common stock of Duke Energy under the Directors' Savings Plan and the plans that merged into the Directors' Savings Plan at the end of 2013 (i.e., the Director Deferred

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Compensation Plan and the Stock Unit Plan). These units do not represent an equity interest in Duke Energy and possess no voting rights, but are equal in economic value to one share of the common stock of Duke Energy.

Name
  Number of Units
 
   

William Barnet, III

    1,104  

G. Alex Bernhardt, Sr.

    14,026  

Michael G. Browning

    25,351  

Harris E. DeLoach, Jr.

    25,399  

Daniel R. DiMicco

    1,154  

John H. Forsgren

    0  

Ann M. Gray

    1,297  

James H. Hance, Jr.

    0  

John T. Herron

    0  

James B. Hyler, Jr.

    9,756  

William E. Kennard

    0  

E. Marie McKee

    49,375  

E. James Reinsch

    0  

James T. Rhodes

    12,275  

Carlos A. Saladrigas

    25,371  

Philip R. Sharp

    0  
   

The table below shows ownership of other units (not listed in the table on page 31) related to the common stock of Duke Energy under the Duke Energy Executive Savings Plan ("Executive Savings Plan"), as well as the plans that merged into the Executive Savings Plan at the end of 2013 (i.e., the Progress Energy, Inc. Management Deferred Compensation Plan; Progress Energy, Inc. Management Incentive Compensation Plan; and Progress Energy, Inc. Performance Share Sub-Plan). These units do not represent an equity interest in Duke Energy and possess no voting rights, but are equal in economic value to one share of the common stock of Duke Energy.

Name
  Number of Units
 
   

Lynn J. Good

    63  

Steven K. Young

    422  

James E. Rogers

    80,372  

Marc E. Manly

    0  

Dhiaa M. Jamil

    1,593  

Lloyd M. Yates

    9,695  
   

The following table lists the beneficial owners of 5% or more of Duke Energy's outstanding shares of common stock as of December 31, 2013. This information is based on the most recently available reports filed with the SEC and provided to us by the company listed.

Name or Identity of Beneficial Owner
  Shares of Common Stock Beneficially Owned
  Percentage
 
   
BlackRock Inc.
40 East 52
nd Street
New York, NY 10022
    40,598,419 (1)   5.80  
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
    35,573,649     5.03  
   

(1)

According to the Schedule 13G/A filed by BlackRock Inc., these shares are beneficially owned by BlackRock Inc. which is the parent holding company or control person in accordance with Rule 13d-1(b)(1)(ii)(G) to various investment companies, and has sole voting power with respect to 33,484,752 shares, 0 shares with shared voting power, sole dispositive power with regard to 40,598,419 shares and 0 shares with shared dispositive power.

(2)

According to the Schedule 13G filed by The Vanguard Group, these shares are beneficially owned by The Vanguard Group, which is the parent holding company or control person in accordance with Rule 13d-1(b)(1)(ii)(G) to various investment companies, and has sole voting power with respect to 1,404,353 shares, 0 shares with shared voting power, sole dispositive power with regard to 34,496,724 shares and 1,076,925 shares with shared dispositive power.

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PROPOSAL 2:     RATIFICATION OF DELOITTE & TOUCHE LLP AS DUKE ENERGY CORPORATION'S INDEPENDENT
PUBLIC ACCOUNTANT FOR 2014

Representatives of Deloitte & Touche LLP ("Deloitte") are expected to be present at the annual shareholder meeting. They will have an opportunity to make a statement and will be available to respond to appropriate questions. Information on Deloitte's fees for services rendered in 2013 and 2012 are listed below. These fees exclude accounting fees and services for Progress Energy paid prior to the Progress Energy merger.

Type of Fees
  2013
  2012
 
   

Audit Fees(1)

  $ 11,600,000   $ 12,200,000  

Audit-Related Fees(2)

    2,150,000     2,460,000  

Tax Fees(3)

    520,000     875,000  

All Other Fees(4)

    30,000     30,000  

 

 

TOTAL FEES:

  $ 14,300,000   $ 15,565,000  
   

             

(1)

Audit Fees are fees billed, or expected to be billed, by Deloitte for professional services for the audit of Duke Energy's consolidated financial statements included in Duke Energy's annual report on Form 10-K and review of financial statements included in Duke Energy's quarterly reports on Form 10-Q for services that are normally provided by Deloitte in connection with statutory, regulatory or other filings or engagements or for any other service performed by Deloitte to comply with generally accepted auditing standards.

(2)

Audit-Related Fees are fees billed by Deloitte for assurance and related services that are reasonably related to the performance of an audit or review of Duke Energy's financial statements, including assistance with acquisitions and divestitures and internal control reviews.

(3)

Tax Fees are fees billed by Deloitte for tax return assistance and preparation, tax examination assistance, and professional services related to tax planning and tax strategy.

(4)

All Other Fees are fees billed by Deloitte for any services not included in the first three categories.

To safeguard the continued independence of the independent public accountant, the Audit Committee adopted a policy that provides that the independent public accountant is only permitted to provide services to Duke Energy and its subsidiaries that have been pre-approved by the Audit Committee. Pursuant to the policy, detailed audit services, audit-related services, tax services and certain other services have been specifically pre-approved up to certain categorical fee limits. In the event that the cost of any of these services may exceed the pre-approved limits, the Audit Committee must pre-approve the service. All other services that are not prohibited pursuant to the SEC's or other applicable regulatory bodies' rules or regulations must be specifically pre-approved by the Audit Committee. All services performed in 2013 and 2012 by the independent public accountant were approved by the Duke Energy Audit Committee and legacy Progress Energy Audit Committee pursuant to their pre-approval policies.

The Board of Directors Recommends a Vote "FOR" the Ratification of Deloitte & Touche LLP as Duke Energy Corporation's Independent Public Accountant for 2014.

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REPORT OF THE AUDIT COMMITTEE

The following is the report of the Audit Committee with respect to Duke Energy's audited financial statements for the fiscal year ended December 31, 2013.

The information contained in this Audit Committee Report shall not be deemed to be "soliciting material" or "filed" or "incorporated by reference" in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except to the extent that Duke Energy specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act.

The purpose of the Audit Committee is to assist the Board in its general oversight of Duke Energy's financial reporting, internal controls and audit functions. The Audit Committee Charter describes in greater detail the full responsibilities of the committee and is available on our website at http://www.duke-energy.com/corporate-governance/board-committee-charters/audit.asp.

The Audit Committee has reviewed and discussed the consolidated financial statements with management and Deloitte & Touche LLP ("Deloitte"), the Company's independent public accountant. Management is responsible for the preparation, presentation and integrity of Duke Energy's financial statements; accounting and financial reporting principles; establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)); establishing and maintaining internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)); evaluating the effectiveness of disclosure controls and procedures; evaluating the effectiveness of internal control over financial reporting; and, evaluating any change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting. Deloitte is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States ("GAAP"), as well as expressing an opinion on the effectiveness of internal control over financial reporting.

The Audit Committee reviewed the Company's audited financial statements with management and Deloitte, and met separately with both management and Deloitte to discuss and review those financial statements and reports prior to issuance. These discussions also addressed the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. Management has represented, and Deloitte has confirmed, that the financial statements were prepared in accordance with GAAP.

In addition, management completed the documentation, testing and evaluation of Duke Energy's system of internal control over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002, and related regulations. The Audit Committee was kept apprised of the progress of the evaluation and provided oversight and advice to management during the process. In connection with this oversight, the Audit Committee received periodic updates provided by management and Deloitte at each regularly scheduled Audit Committee meeting. At the conclusion of the process, management presented to the Audit Committee on the effectiveness of the Company's internal control over financial reporting. The Audit Committee also reviewed the report of management contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 ("Form 10-K") filed with the SEC, as well as Deloitte's Report of Independent Registered Public Accounting Firm included in the Company's Form 10-K related to its audit of (i) the consolidated financial statements and (ii) the effectiveness of internal control over financial reporting. The Audit Committee continues to oversee the Company's efforts related to its internal control over financial reporting and management's preparations for the evaluation in fiscal 2014.

The Audit Committee has discussed with Deloitte the matters required to be discussed by professional and regulatory requirements, including, but not limited to, the standards of the Public Company Accounting Oversight Board regarding The Auditors' Communications with Those Charged with Governance. In addition, Deloitte has provided the Audit Committee with the written disclosures and the letter required by "Public Company Accounting Oversight Board Ethics and Independence Rule 3526, Communications with Audit Committees Concerning Independence" that relates to Deloitte's independence from Duke Energy and its subsidiaries and the Audit Committee has discussed with Deloitte the firm's independence.

Based on its review of the consolidated financial statements and discussions with and representations from management and Deloitte referred to above, the Audit Committee recommended that the audited financial statements be included in Duke Energy's Form 10-K, for filing with the SEC.

Audit Committee
Carlos A. Saladrigas (Chair)
G. Alex Bernhardt, Sr.
Michael G. Browning
John H. Forsgren
James B. Hyler, Jr.
James T. Rhodes

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PROPOSAL 3:     ADVISORY VOTE TO APPROVE DUKE ENERGY CORPORATION'S NAMED EXECUTIVE OFFICER COMPENSATION

At the 2011 Annual Shareholder Meeting, our shareholders recommended that our Board of Directors hold say-on-pay votes on an annual basis. As a result, we are providing our shareholders with the opportunity to approve, on a nonbinding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement. This proposal gives our shareholders the opportunity to express their views on the compensation of our named executive officers.

In connection with this proposal, the Board of Directors encourages shareholders to review in detail the description of the compensation program for our named executive officers that is set forth in the Compensation Discussion and Analysis beginning on page 36, as well as the information contained in the compensation tables and narrative discussion in this proxy statement.

As described in more detail in the Compensation Discussion and Analysis section, the guiding principle of our compensation philosophy is that pay should be linked to performance and that the interests of our executives and shareholders should be aligned. Our compensation program is designed to provide significant upside and downside potential depending on actual results as compared to predetermined measures of success. A significant portion of our named executive officers' total direct compensation is directly contingent upon achieving specific results that are important to our long-term success and growth in shareholder value. We supplement our pay-for-performance program with a number of compensation policies that are aligned with the long-term interests of Duke Energy and its shareholders.

We are asking our shareholders to indicate their support for the compensation of our named executive officers as disclosed in this proxy statement by voting "FOR" the following resolution:

"RESOLVED, that the shareholders of Duke Energy approve, on an advisory basis, the compensation paid to Duke Energy's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K of the Securities Act of 1933, as amended, including the Compensation Discussion and Analysis, the compensation tables and the narrative discussion in Duke Energy's 2014 proxy statement."

Because your vote is advisory, it will not be binding on the Board of Directors, the Compensation Committee or Duke Energy. The Compensation Committee, however, will review the voting results and take them into consideration when making future decisions regarding the compensation of our named executive officers.

The Board of Directors Recommends a Vote "FOR" the Approval of the Compensation of Our Named Executive Officers as Disclosed in this Proxy Statement.

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REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of Duke Energy has reviewed and discussed the Compensation Discussion and Analysis with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and Duke Energy's Form 10-K for the year ended December 31, 2013.

Compensation Committee

E. Marie McKee (Chair)
Daniel R. DiMicco
Ann M. Gray
James H. Hance, Jr.

COMPENSATION DISCUSSION AND ANALYSIS

The purpose of this Compensation Discussion and Analysis is to provide information about Duke Energy's compensation objectives and policies for our named executive officers. Our named executive officers for 2013 include:

Name
  Title
 
Lynn J. Good(1)   Vice Chairman, President and Chief Executive Officer
Steven K. Young(2)   Executive Vice President and Chief Financial Officer
James E. Rogers   Former Chairman, President and Chief Executive Officer
Marc E. Manly   Executive Vice President and President, Commercial Businesses
Dhiaa M. Jamil   Executive Vice President and President, Duke Energy Nuclear
Lloyd M. Yates   Executive Vice President, Regulated Utilities
 

(1)

Ms. Good served as Executive Vice President and Chief Financial Officer until her promotion effective July 1, 2013.

(2)

Mr. Young served as Vice President, Controller and Chief Accounting Officer until his promotion effective August 6, 2013.

Executive Summary


Objectives of the Compensation Program

Our executive compensation program is designed to achieve the objectives set forth below:

Objective
  Description
 
Pay-for-Performance   We emphasize performance-based compensation, which motivates executives and key employees to achieve strong financial, operational and individual performance in a manner that balances short-term and long-term results.
Retain Talented Leadership   We attempt to attract and retain talented executive officers and key employees by providing total compensation competitive with that of other executives and key employees of similarly sized companies and with similar complexity, whether within or outside of the utility sector.
Align Interests of Executives with Shareholders   We encourage a long-term commitment to Duke Energy and align the interests of executives with shareholders, by providing a significant portion of total compensation in the form of stock-based incentives and requiring target levels of stock ownership.
 

Pay-for-Performance Program

The guiding principle of our compensation philosophy is that pay should be linked to performance and that the interests of executives and shareholders should be aligned. Our compensation program is designed to provide significant upside and downside potential depending on actual results, as compared to predetermined measures of success.

As described below, the variable and equity-based components of our compensation program are the short-term incentives ("STI") and long-term incentives ("LTI"). Our STI opportunities are provided under an annual cash bonus plan, the payout of which is dependent on corporate, operational and individual performance. Our LTI opportunities are provided through a three-year equity based compensation plan (i.e., restricted stock units and performance shares), the payout of which is also dependent on corporate performance.

As a result, a significant portion of our named executive officers' total direct compensation – which consists of base salary as well as target STI and LTI opportunities – is directly contingent on achieving specific results that are important to our long-term success and growth in shareholder value. For example, approximately 85% of the total direct compensation opportunity (assuming target performance) for Ms. Good, and

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approximately 73% of the total direct compensation opportunity (assuming target performance) for our other named executive officers, other than Mr. Rogers, was provided as of December 31, 2013, in the form of STI and LTI.

The actual amount of compensation received by the named executive officers in connection with STI and LTI opportunities varies based on our stock price and the extent to which predetermined corporate, operational and individual goals are achieved. The following charts illustrate the components of the target total direct compensation opportunities provided to our named executive officers.

LOGO

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COMPENSATION DISCUSSION AND ANALYSIS

Align Interests of Named Executive Officers and Shareholders

We supplement our pay-for-performance program with a number of compensation policies intended to align the interests of management and our shareholders. Following are key features of our executive compensation program.

     
AT DUKE ENERGY WE...
  AT DUKE ENERGY WE DO NOT...
     

GRAPHIC
  Tie a high ratio of the pay of our other executives to corporate and individual performance. Approximately 85% of the total direct compensation opportunity (assuming target performance) for Ms. Good, and approximately 73% of the total direct compensation opportunity (assuming target performance) for our other named executive officers, other than Mr. Rogers, was provided in the form of STI and LTI as of December 31, 2013.  
GRAPHIC
  Provide employment agreements to a broad group. Except for our Chief Executive Officer, no other executives are provided a comprehensive employment agreement (unless assumed in connection with the acquisition of another company).
     

GRAPHIC
 

Require significant stock ownership. We maintain aggressive guidelines to reinforce the importance of Duke Energy stock ownership. This is intended to align the interests of executives and shareholders and to focus the executives on our long-term success. Under these guidelines, each named executive officer must own Duke Energy shares in accordance with the following schedule:

 
GRAPHIC
  Permit hedging or pledging of Duke Energy securities. We have a policy that prohibits employees (including the named executive officers) from trading in options, warrants, puts and calls or similar instruments in connection with Duke Energy securities, or selling Duke Energy securities "short." In addition, we prohibit the pledging of Duke Energy securities in margin accounts.

Leadership Position
  Value of Shares
 
Chief Executive Officer   5x Base Salary
Other Named Executive Officers   3x Base Salary
Non-Employee Directors   5x Annual Cash Retainer
 

     

GRAPHIC
  Maintain a stock holding policy. Each named executive officer is required to hold 50% of all shares acquired under the LTI program (after the payment of any applicable taxes) and 100% of all shares acquired upon the exercise of stock options (after payment of the exercise price and taxes) until the applicable stock ownership requirement is satisfied.

Each of our named executive officers and directors was in compliance with the stock ownership/stock holding policy during 2013.

 
GRAPHIC
  Provide severance benefits upon a change in control. Our Change in Control Agreements provide cash severance only upon a "double trigger," meaning that change in control severance benefits are payable only if our named executive officers incur a qualifying termination of employment (i.e., a voluntary termination for "good reason" or an involuntary termination without "cause") and the termination occurs in connection with a change in control of Duke Energy.
     

GRAPHIC
  Tie incentive compensation to a clawback policy. We maintain a "clawback policy," which would allow us to recover (i) certain incentive compensation based on financial results in the event those results were restated due at least partially to the recipient's fraud or misconduct or (ii) an inadvertent payment based on an incorrect calculation.  
GRAPHIC
  Provide Golden Parachute Tax Gross-Ups. We do not provide excise tax gross-ups for severance benefits received by our current Duke Energy named executive officers under the Change in Control Agreements or under the Duke Energy Corporation Executive Severance Plan ("Executive Severance Plan"). However, as a result of the Progress Energy merger, we assumed a change in control severance plan (i.e., the Progress Energy, Inc. Management Change-In-Control Plan) that provides golden parachute tax gross-up payments under certain circumstances, until the plan expires pursuant to its terms on July 2, 2014. This tax-gross up provision was adopted by Progress Energy prior to its merger with Duke Energy.
     

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AT DUKE ENERGY WE...
  AT DUKE ENERGY WE DO NOT...
     

GRAPHIC
  Provide a consistent level of severance benefits. We maintain an Executive Severance Plan in order to provide a consistent approach to executive severance and to provide eligible employees, including our named executive officers (excluding Ms. Good, who is provided with severance protection through her employment agreement, and Mr. Yates), with certainty and security while they are focusing on their duties and responsibilities. Under this plan, severance benefits are payable only if our named executive officers incur a qualifying termination of employment (i.e., a voluntary termination for "good reason" or an involuntary termination without "cause").  
GRAPHIC
  Encourage excessive or inappropriate risk-taking through our compensation program. Our plans focus on aligning Duke Energy's compensation policies with the long-term interests of Duke Energy and avoid rewards that could create unnecessary risks to the Company, as evidenced by the policies described on page 50.
     

GRAPHIC
  Maintain a shareholder approval policy for severance agreements. We have a policy generally to seek shareholder approval for any future agreements with our named executive officers that provide severance benefits in excess of 2.99 times the executive's annual compensation or that provide for tax gross-ups in connection with a termination event.  
GRAPHIC
  Provide excessive perquisites. Our perquisites program is limited to an executive physical, an airline membership club to facilitate travel, limited personal use of corporate aircraft (subject to the requirement that the executive reimburse Duke Energy for the direct operating costs for such travel), financial planning and matching charitable contributions. See page 48 for additional details.
     

GRAPHIC
  Comply with equity award granting policy. In recognition of the importance of adhering to specific practices and procedures in the granting of equity awards, the Compensation Committee has adopted a policy that applies to the granting of equity awards for employees and directors. Under this policy, annual grants to employees may be made at any regularly scheduled meeting, provided that reasonable efforts will be made to make such grants at the first regularly scheduled meeting of each calendar year, and annual grants to independent directors may be made by the Board of Directors at any regularly scheduled meeting, provided that reasonable efforts will be made to make such grants at the regularly scheduled meeting that is held in conjunction with the annual shareholder meeting each year.        
     

GRAPHIC
  Use an independent compensation consultant. The Compensation Committee has engaged Frederic W. Cook & Company, Inc. to report directly to the Compensation Committee as its independent compensation consultant. The consultant has been instructed that it is to provide completely independent advice to the Compensation Committee and is not permitted to provide any services to Duke Energy other than at the direction of the Compensation Committee.        
     

Named Executive Officer Transitions


Effective July 1, 2013, Ms. Good, formerly our Executive Vice President and Chief Financial Officer, was appointed as President and Chief Executive Officer and was elected as a member of our Board of Directors and became our Vice Chairman. Ms. Good succeeds Mr. Rogers, who retired as President and Chief Executive Officer, effective July 1, 2013, and who stepped down as Chairman (and a member) of the Board of Directors at the end of 2013.

In connection with her promotion, Ms. Good received an increase in her annual base salary from $675,000 to $1,200,000, an increase in her STI opportunity from 80% to 125% of her annual base salary and an increase in her LTI opportunity from 200% to 450% of her annual base salary. These increases were effective only for the second half of 2013. Additionally, Ms. Good received a one-time promotion grant (70% of which was provided in performance shares and the remainder of which was provided in restricted stock units) under the 2013 Long-Term Incentive Plan valued at $2,025,000, which represented the difference between her prior LTI opportunity and her new opportunity for the portion of 2013 that followed her promotion. These adjustments were approved by the Compensation Committee and the independent members of the Board of Directors, after consulting with the Compensation Committee's independent compensation consultant regarding reasonable ranges of total compensation, given Ms. Good's experience and new role and responsibilities with Duke Energy. Ms. Good is also covered by an employment agreement, which is described in more detail on page 62.

Effective August 6, 2013, Mr. Young, formerly our Chief Accounting Officer and Controller, was appointed as Executive Vice President and Chief Financial Officer. In connection with his

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COMPENSATION DISCUSSION AND ANALYSIS

promotion, Mr. Young received an increase in his annual base salary from $333,952 to $525,000, an increase in his STI opportunity from 50% to 70% of his annual base salary and an increase in his LTI opportunity from 100% to 150% of his annual base salary. These adjustments were approved by the Compensation Committee, after consulting with the Compensation Committee's independent compensation consultant regarding reasonable ranges of total compensation, given Mr. Young's experience and new role and responsibilities with Duke Energy.

Peer Groups


Competitive Compensation Practices

One of our core compensation objectives is to attract and retain talented executive officers through total compensation that generally is competitive with that of other executives and key employees of similarly sized companies and with similar complexity, whether within or outside of the utility sector. As a result, in setting 2013 compensation levels, the Compensation Committee reviewed market surveys showing each element of total compensation against comparable positions at comparable companies. For utility-specific positions, the market data sources were: (i) the Towers Watson CDB Energy Services Executive Compensation Database, which consists of the 93 companies listed on Appendix A and (ii) the Philadelphia Utility Index. For general corporate positions, the market data sources also included the Towers Watson CDB General Industry Executive Compensation Database, which consists of the 94 companies with revenues greater than $12 billion, as listed on Appendix B.

The Compensation Committee also developed a customized peer group in 2013 for review of executive compensation levels and plan design practices. The peer group generally consists of similarly sized companies from the utility and general industry sectors that, as of the establishment of the peer group, had revenue and market capitalization between $12 billion–$72 billion and $20 billion–$100 billion, respectively, with the general industry companies also having satisfied at least one of the following characteristics: (i) operates in capital-intensive industry; (ii) operates in a highly regulated industry; (iii) has significant manufacturing operations; or (iv) has more than 50% of its revenue in the United States. The customized combined peer group consists of:

Compensation Peer Group
 
3M   Dominion Resources   FedEx   Monsanto
American Electric Power   Dow Chemical   FirstEnergy   NextEra Energy
CenturyLink   DuPont   General Dynamics   PG&E Corp.
Colgate-Palmolive   Eaton   International Paper   Southern
Consolidated Edison   Edison International   Lockheed Martin   UPS
Deere & Co.   Exelon   Medtronic    
 

The Compensation Committee reviewed data for this customized peer group when establishing the compensation of Ms. Good upon her promotion to Chief Executive Officer, effective July 1, 2013, and the compensation of Mr. Young upon his promotion to Chief Financial Officer, effective August 6, 2013.

At least once a year, the Compensation Committee reviews tally sheets for each named executive officer, which include a summary of compensation paid in prior years, compensation for the current year, the valuation (at various assumed stock prices) of all outstanding equity awards and a summary of amounts payable upon a termination of employment under various circumstances. This information allows the Compensation Committee to evaluate the total compensation package for each named executive officer, as well as adjustments to specific elements of the total direct compensation package. After reviewing this information: (i) the Compensation Committee was able to confirm that the 2013 target total direct compensation for the named executive officers generally was within the competitive range of the market data and (ii) the Committee is able to better understand the relationship of various components of the total compensation program to each other.

Elements of Duke Energy's Compensation Program


As discussed in more detail below, during 2013, the principal components of compensation for the named executive officers were: base salary; short-term incentive compensation; long-term equity incentive compensation; retirement and welfare benefits and perquisites.

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GRAPHIC

Following is a summary of each principal compensation component provided to the Duke Energy named executive officers during 2013.

Base Salary. The salary for each executive is based upon job responsibilities, level of experience, individual performance, comparisons to the salaries of executives in similar positions obtained from market surveys and internal comparisons. In light of these factors, in February 2013, the Compensation Committee increased the base salaries of Ms. Good and Messrs. Young, Jamil and Yates by approximately 8%, 3%, 18% and 10%, respectively. Additionally, Ms. Good and Mr. Young received base salary increases in connection with their respective promotions as described above. Mr. Rogers was paid substantially in the form of equity-based compensation and did not receive a base salary in 2013.

Short-Term Incentive Compensation. STI opportunities are provided to our named executive officers, other than Mr. Rogers, under the Duke Energy Corporation Executive Short-Term Incentive Plan ("STI Plan") to promote the achievement of annual performance objectives.

Each year, the Compensation Committee establishes the incentive opportunity for each participating named executive officer, which is based on a percentage of his or her base salary, along with the corporate, operational and individual goals that must be achieved to earn that incentive opportunity. Unless deferred, the earned STI opportunity is paid in cash. Aside from the increases in target annual incentive award opportunities for Ms. Good and Mr. Young as discussed above, no changes were made to the target annual incentive award opportunities of the named executive officers in 2013, each of which is listed below.

Name
  Target Incentive Opportunity
(as a % of base salary)

 

Lynn J. Good

  125%

Steven K. Young

  70%

Marc E. Manly

  80%

Dhiaa M. Jamil

  80%

Lloyd M. Yates

  80%
 

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Corporate Objectives. During 2013, depending on actual performance, participating named executive officers were eligible to earn up to 183.75% of the amount of their STI target opportunity. This opportunity was based on several corporate objectives, including Duke Energy's achievement of an adjusted diluted earnings per share ("EPS") goal, an operations and maintenance ("O&M") expense control goal and a reliability goal, all of which had an aggregate weighting of 80%.

The Compensation Committee established the targets for each goal in February 2013. The 2013 corporate goals, which were selected to promote management actions beneficial to Duke Energy's various stakeholders, including investors and customers, as well as the actual performance results, were as follows:

Goal(1)
  Weight
  Threshold (50%)
  Target
(100%)

  Maximum(2)
  Result
  Payout    
 
   
Adjusted Diluted EPS(3)     50 % $ 4.02   $ 4.32   $ 4.62   $ 4.35     110 %
O&M Expense Control     20 % $ 5.405B   $ 5.300B   $ 5.195B   $ 5.331B     85.3 %
Reliability(4)     10 %                              

Regulated Generation Commercial Availability

          87.06 %   87.92 %   88.65 %   85.68 %   0 %

Nuclear Generation Capacity Factor

          91.00 %   93.25 %   95.50 %   92.81 %   90.2 %

System Average Interruption Frequency Index (SAIFI)

          1.30     1.19     1.08     1.14     122.7 %

System Average Interruption Duration Index (SAIDI)

          143     130     117     121     134.6 %

Commercial Availability (Midwest and Renewables Yield)

          90.35 %   92.63 %   94.77 %   91.90 %   84 %

International Equivalent Availability

          90.40 %   92.40 %   94.40 %   92.52 %   103 %
   

(1)

For additional information about the calculation of the EPS and O&M expense control measures, see page 51.

(2)

A payout of up to 200% of the target opportunity is available for the adjusted diluted EPS goal and a payout of up to 150% of the target opportunity is available for the O&M and reliability goals.

(3)

If an adjusted diluted EPS performance level of at least $3.87 was not achieved, the participating named executive officers would not have received a payout under the 2013 STI Plan. The Compensation Committee adjusted the EPS performance levels (threshold, target and maximum), and the $3.87 minimum level, up by $0.02 to reflect earnings associated with assets that were not divested as of the date assumed in the 2013 business plan.

(4)

The reliability goals are calculated as described below. Each reliability goal contains a weighting of one-sixth of the aggregate weighting of 10%.

Reliability Metrics
  Description
 
Regulated Generation Commercial Availability   A measure of regulated fossil generation reliability, determined as the weighted percentage of time the regulated fossil generation units are available to generate electricity, where the availability each hour is weighted by the difference between market price and unit cost.
Nuclear Generation Capacity Factor   A measure of the amount of electricity produced by a nuclear generating unit relative to the amount of electricity the unit is capable of producing.
System Average Interruption Frequency Index (SAIFI)   A measure of the number of sustained outages (greater than five minutes in duration) experienced during the year per customer served from both transmission and distribution systems calculated in accordance with the applicable guidelines set forth in the IEEE Standard 1366-Guide for Electric Power Distribution Reliability Indices, including application of the "major event day" exclusions described therein.
System Average Interruption Duration Index (SAIDI)   A measure of the number of outage minutes experienced during the year per customer served from both distribution and transmission systems calculated in accordance with the applicable guidelines set forth in the IEEE Standard 1366-Guide for Electric Power Distribution Reliability Indices, including application of the "major event day" exclusions described therein.
Commercial Availability (Midwest and Renewables Yield)   A composite measure of (i) non-regulated fossil generation reliability, determined as the weighted percentage of time the non-regulated fossil generation units are available to generate electricity, where the availability each hour is weighted by the difference between market price and unit cost and (ii) a renewables energy yield metric, determined by comparing actual generation to expected generation, based on wind speed at the turbines and solar intensity.
International Equivalent Availability   A measure of the amount of electricity that potentially could be produced by an international generating unit relative to the amount of electricity the unit is actually producing.
 

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Individual Objectives. The remaining 20% of each participating named executive officer's 2013 opportunity under the STI Plan was based on individual objectives. The individual goals, in the aggregate, could result in a payout with respect to the target opportunity equal to 50% in the event of threshold performance, 100% in the event of target performance and 150% in the event of maximum performance. As described below, the individual goals for each participating named executive officer consisted of a combination of strategic and operational objectives, which were measured based on a subjective determination.

Ms. Good's individual goals for the portion of 2013 (July 1, 2013 – December 31, 2013) during which she served as Chief Executive Officer were as follows:

Goal
  Weight
  Description
 
Transition Plan     10%   Develop and implement an effective transition plan while maintaining a focus on results for 2013.
Regulatory Initiatives     10%   Provide effective leadership and direction with respect to strategic priorities as well as key regulatory initiatives.
 

Ms. Good's individual goals for the portion of 2013 (January 1, 2013 – June 30, 2013) during which she served as Chief Financial Officer were as follows:

Goal
  Weight
  Description
 
Regulatory Initiatives     10%   Provide effective leadership and strategic direction with respect to regulatory initiatives.
Merger Integration     10%   Deliver on the synergies related to the merger through integration efforts, as well as identification of additional, sustainable savings or operational performance enhancements.
 

Mr. Young's 2013 individual goals for the portion of 2013 (August 6, 2013 – December 31, 2013) during which he served as Chief Financial Officer were as follows:

Goal
  Weight
  Description
 
Transition Plan     10%   Develop and implement a transition plan into CFO role.
Regulatory Initiatives     5%   Provide effective leadership and strategic direction with respect to regulatory initiatives.
Merger Integration     5%   Deliver on the synergies related to the merger through integration efforts, as well as identification of additional, sustainable savings or operational performance enhancements.
 

Mr. Young's individual goals for the portion of 2013 (January 1, 2013 – August 5, 2013) during which he served as Chief Accounting Officer and Controller were as follows:

Goal
  Weight
  Description
 
Merger Integration     5%   Successfully achieve the 2013 merger integration plan.
Financial Support     5%   Provide financial support to operational and commercial functions.
Regulatory Support     5%   Provide support for the retail rate cases, settlements and related regulatory filings planned for 2013.
Employee Development     5%   Develop and implement an employee engagement and development program.
 

Mr. Manly's 2013 individual goals were as follows:

Goal
  Weight
  Description
 
Commercial Business     8%   Confirm the business mix proportion for Duke Energy and the strategic direction of commercial businesses.
Leadership Initiatives     8%   Successfully lead Commercial Business team to execute on earnings commitments, growth and capital rotation opportunities.
Employee Development     4%   Lead Commercial Business team to build competitive advantage by strengthening employee development and engagement.
 

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Mr. Jamil's 2013 individual goals were as follows:

Goal
  Weight
  Description
 
Nuclear Generation     5%   Improve safety, reliability and cost-efficiency (including a focus on fleet governance and alignment) of nuclear generation.
Merger Integration     5%   Implement the 2013 planned IT projects and functional area merger savings initiatives.
Project Management     5%   Implement Project Management Center of Excellence Principles across the enterprise.
Crystal River 3     5%   Resolve uncertainty around Crystal River 3 and successfully manage the outcome of the decommission or repair decision and the mediation versus arbitration decision.
 

Mr. Yates' 2013 individual goals were as follows:

Goal
  Weight
  Description
 
Financial Objectives     5%   Deliver on 2013 Regulated Utilities financial objectives (net income and capital).
Regulatory Initiatives     5%   Enhance relationships, trust and transparency with state and federal regulators and legislators to facilitate constructive public policy and financial results.
Collaboration     5%   Collaborate with functional leaders to achieve Regulated Utility and enterprise objectives with emphasis on operational efficiency and effectiveness.
Integration     5%   Achieve integration initiatives to promote and collaborate across business units delivering on utility merger synergies and initiatives.
 

Safety Component. In order to encourage a continued focus on safety, the Compensation Committee included the following safety measures in the 2013 STI Plan:

Safety Penalty. The STI Plan payments for each of the participating named executive officers were subject to a safety penalty of 5% depending on Duke Energy's 2013 enterprise-wide serious injuries and fatalities ("SIF") rate. In February 2013, the Compensation Committee established a SIF rate goal of 1.26. Duke Energy's SIF rate in 2013 was 0.74, which was better than the SIF goal such that the safety penalty was not triggered and did not decrease the 2013 STI Plan awards.

Safety Adder. The STI Plan payments of the participating named executive officers were also eligible for a safety adder that could result in an increase of 5% if there were no work-related fatalities of any Duke Energy employee, contractor or subcontractor during 2013. Because work-related fatalities occurred during 2013, the safety adder did not result in a 5% increase to the payments of eligible employees, including the participating named executive officers.

Payouts. As a result of the aggregate corporate, operational and individual performance, each participating named executive officer earned bonuses under the 2013 STI Plan equal to:

Name
  Payout
 
   

Lynn J. Good

  $ 1,103,411  

Steven K. Young

  $ 265,840  

Marc E. Manly

  $ 494,256  

Dhiaa M. Jamil

  $ 528,048  

Lloyd M. Yates

  $ 497,126  

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COMPENSATION DISCUSSION AND ANALYSIS

Long-Term Incentive Compensation

Opportunities under the LTI program are provided to our named executive officers to align executive and shareholder interests in an effort to maximize shareholder value. In this regard, each year the Compensation Committee reconsiders the design and amount of the LTI awards and generally grants equity awards at the Compensation Committee's first regularly scheduled meeting each year. Duke Energy's executive officers do not have a role in selecting the date on which LTI awards are granted. Because the closing price of Duke Energy's common stock is a key factor in determining the number of shares in each employee's LTI award, the Compensation Committee considers volatility when determining the size of LTI plan awards.

2011-2013 Performance Shares under the Duke Energy 2011 LTI Program. The 2011 performance share cycle commenced on January 1, 2011, and ended on December 31, 2013. The performance shares generally vest only to the extent two equally weighted performance measures were satisfied. The first measure was based on Duke Energy's relative total shareholder return ("TSR") for the three-year period from January 1, 2011 to December 31, 2013, as compared to the companies in the Philadelphia Utility Index, as follows:

Relative TSR Performance Percentile
  Percent Payout of
Target 2011-2013
Performance Shares

  Result
  Payout of
Target

   
     

75th or Higher

    150 %   70.6th     141.2 %  

50th (Target)

    100 %              

25th

    50 %              

Below 25th

    0 %              
 

For purposes of the LTI program, TSR is calculated based on the change, expressed as a percentage, in the fair market value of an initial investment in common stock, over a specified period, with dividends reinvested.

The second measure was based on Duke Energy's adjusted return on equity ("ROE") for the three-year period from January 1, 2011 to December 31, 2013, as follows:

Adjusted Achieved ROE
  Percent Payout of
Target 2011-2013
Performance Shares

  Result
  Payout of
Target

   
     

10.25% or Higher

    150 %   11.3 %   150 %  

9.75% or Higher (Target)

    100 %              

9.25%

    50 %              

Below 9.25%

    0 %              
 

For additional information about the calculation of the ROE measure, see page 51.

In the aggregate, this performance corresponds to a payout of 145.6% of the target number of 2011-2013 performance shares, plus dividend equivalents earned during the 2011-2013 performance period. The following table lists the number of 2011-2013 performance shares to which our named executive officers (other than Mr. Rogers) became vested at the end of the performance cycle:

Name
  2011-2013 Performance Shares
 
   

Lynn J. Good

    22,676  

Steven K. Young

    5,835  

Marc E. Manly

    22,676  

Dhiaa M. Jamil

    19,841  

Lloyd M. Yates

    11,992  
   

2011-2013 Performance Shares for Mr. Yates. The performance shares listed above that Mr. Yates received from Progress Energy, prior to its merger with Duke Energy, for the 2011-2013 performance cycle, contained the following two equally-weighted performance measures:

TSR.  The first performance measure was based on the relative TSR of Progress Energy (and, after the merger, the relative TSR of Duke Energy) for the three-year period from January 1, 2011 to December 31, 2013, as compared to the companies in a predetermined group of highly regulated utilities. The payout that could be earned for this measure was equal to 50% of the target opportunity in the event that relative TSR performance was at the 40th percentile, 100% of the target opportunity in the event that relative TSR performance was at the 50th percentile, and 200% of the target opportunity in the event that relative TSR performance was at the 80th percentile. Based on the actual relative TSR performance of Progress Energy and Duke Energy at the 91.6th percentile, Mr. Yates received a maximum payout (i.e., 200% of the target opportunity) for the portion of his performance shares related to the TSR performance measure.

EPS Growth.  The second performance measure was based on the rate of earnings growth during the three-year period from January 1, 2011 to December 31, 2013, calculated by reference to the ongoing EPS of Progress Energy in 2011 and the ongoing EPS of Duke Energy in 2012 and 2013. The payout that could be earned for this measure was equal to 50% of the target opportunity in the event that the rate of growth of ongoing EPS was at least 1% per year, 100% of the target opportunity in the event that the rate of growth of ongoing EPS was at least 2%, and 200% of the target opportunity in the event that the rate of growth of ongoing EPS was 5% or higher. Based on the actual rate of growth of ongoing EPS of Progress Energy and Duke Energy during 2011-2013, Mr. Yates received no payout for the portion of his performance shares related to the earnings growth measure.

In the aggregate, this performance corresponds to a payout of 100% of the target number of 2011-2013 performance shares, plus dividend equivalents earned during the 2011-2013 performance period.

2013 LTI Program. Aside from increases in LTI opportunities for Ms. Good and Mr. Young described above on page 39, the LTI opportunities for the remaining named executive officers remained the same as 2012 at 200% of base salary. No change was made because the LTI levels remain consistent with market

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practices and reflect our pay-for-performance culture. Under the 2013 LTI program, 30% of each participating named executive officer's LTI opportunity was provided in the form of restricted stock units and the remaining 70% was provided in the form of performance shares, as follows:

Name
  Grant
Date

  Performance
Shares
(at Target Level)

  Restricted
Stock
Units

 
   

Lynn J. Good

    2/25/2013     13,674     5,860  

Lynn J. Good

    8/26/2013     21,546     9,234  

Steven K. Young

    2/25/2013     3,383     1,450  

Marc E. Manly

    2/25/2013     12,155     5,209  

Dhiaa M. Jamil

    2/25/2013     13,167     5,643  

Lloyd M. Yates

    2/25/2013     11,446     4,905  
   

In order to enhance our retention incentives, the 2013 restricted stock units generally vest in equal portions on each of the first three anniversaries of the grant date, provided the recipient continues to be employed by Duke Energy on each vesting date.

In order to emphasize pay-for-performance, the 2013 performance shares generally vest at the end of the three-year performance period only to the extent the TSR performance goal is satisfied. The TSR performance goal is based on Duke Energy's relative TSR for the three-year performance period from January 1, 2013 to December 31, 2015, as compared to the companies in the Philadelphia Utility Index, as follows:

TSR Percentile Ranking
  Percent Payout of
Target Performance Shares

   
 

90th or Higher

    200 %  

50th (Target)

    100 %  

25th

    30 %  

Below 25th

    0 %  
 

In prior performance cycles, adjusted ROE was used as a measure in conjunction with TSR. In 2013, in connection with its review of the design of the compensation plans of Duke Energy and Progress Energy, the Compensation Committee determined that it would utilize TSR as the sole performance measure for the 2013 LTI program in order to emphasize its importance in aligning the interests of executives and shareholders.

Compensation of Mr. Rogers

Mr. Rogers retired as President and Chief Executive Officer on July 1, 2013, but remained as the Chairman and a member of the Board of Directors until December 31, 2013. Under his 2009 employment agreement with Duke Energy, Mr. Rogers did not receive a base salary and he was generally not eligible to participate in Duke Energy's incentive compensation and benefit plans, including its cash bonus programs. Instead, pursuant to his 2009 employment agreement, Mr. Rogers was compensated primarily through annual grants of stock options, restricted stock units and performance shares, as follows:

Compensation Element
  Description
 
Stock Option   An annual stock option grant with a value of $1,600,000 which vests ratably in three annual installments. Mr. Rogers generally may not dispose of any shares acquired upon exercise of any such options until January 1, 2014, except to pay the exercise price of the option or related tax withholding.
Restricted Stock Units   An annual restricted stock unit award with a value of $2,000,000 which vests ratably in four annual installments. Dividend equivalents were paid in cash.
Annual Performance Shares   An annual performance share award based on annual performance metrics consistent with those established for the other named executive officers under the STI Plan, except that the maximum payment is equal to 199.5% of the target opportunity rather than 183.75%, with a target value of $2,000,000. Dividend equivalents are accumulated and paid only if the underlying performance shares become payable.
Long-Term Performance Shares   A long-term performance share award based on performance over a three-year performance period, with performance metrics consistent with those established for the other named executive officers under each year's LTI program, with a target value of $2,400,000. Dividend equivalents are accumulated and paid only if the underlying performance shares become payable.
 

Annual Performance Shares. For 2013, Mr. Rogers' annual performance shares covered 28,939 shares of Duke Energy common stock (at target performance). The performance criteria applicable to the annual performance shares were weighted 50%, 20%, and 10% and were based on the same adjusted diluted EPS goal, O&M expense control goal and reliability goal, respectively, as were

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applicable for the other named executive officers under the 2013 STI Plan (except for a different maximum payout as described above), and the remaining 20% was based on the following individual goals:

Goal
  Weight
  Description
 

Regulatory Initiatives

    12.5 % Provide leadership and direction with respect to strategic and regulatory initiatives.

Merger Integration

    7.5 % Deliver on the synergies related to the merger through integration efforts and foster and build the Duke Energy brand and reputation.
 

The annual portion of Mr. Rogers' 2013 performance share opportunity was subject to the same 5% SIF-based safety penalty and 5% safety adder (in the event of no work-related employee or contractor fatality) that applied to the other participating named executive officers under the 2013 STI Plan. The penalty was not triggered due to the fact that Duke Energy's actual SIF rate was better than the pre-established target SIF rate. In addition, the Compensation Committee determined that the safety adder was not achieved and would not increase the payout of Mr. Rogers' annual 2013 performance shares by 5%.

Based on the actual level of achievement of the corporate objectives and individual objectives, Mr. Rogers earned a payout of 31,363 annual performance shares for 2013, plus dividend equivalents.

Mr. Rogers also was granted long-term performance shares in 2011 with respect to the 2011-2013 performance period. These performance shares were subject to the same two equally weighted performance measures that applied to other participating named executive officers, as described on page 45. Based on Duke Energy's performance, Mr. Rogers received a payout of 64,784 performance shares, plus dividend equivalents earned during the 2011-2013 performance period, which is equal to a payout of 145.6% of the target number of Mr. Rogers' 2011-2013 performance shares.

For 2013, the performance criteria applicable to the long-term portion of Mr. Rogers' performance shares was the same predetermined measure based on TSR as was applicable for the other participating named executive officers under the 2013 LTI program, as measured over the 2013-2015 performance period.

Retirement and Welfare Benefits

Our named executive officers participate in the retirement and welfare plans generally available to other eligible employees. In addition, in order to attract and retain key executive talent, we believe that it is important to provide the executive officers, including our named executive officers, with certain limited retirement benefits that are offered only to a select group of management. The retirement plans that are provided to our named executive officers, including the plans offered only to a select group of management, are described on pages 57–61. These benefits are comparable to the benefits provided by peers of Duke Energy, as determined based on market surveys.

Duke Energy provides the named executive officers with the same health and welfare benefits it provides to all other similarly situated employees, and at the same cost charged to all other eligible employees. The named executive officers also are entitled to the same post-retirement health and welfare benefits as those provided to similarly situated retirees.

Perquisites

In 2013, Duke Energy provided our named executive officers with certain other perquisites, which are disclosed in footnote 5 to the Summary Compensation Table on page 52. Duke Energy provides these perquisites as well as other benefits to certain executives in order to provide competitive compensation packages. The cost of perquisites and other personal benefits is not part of base salary and, therefore, do not affect the calculation of awards and benefits under Duke Energy's other compensation arrangements (e.g.,

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retirement and incentive compensation plans). Unless otherwise noted, each of our named executive officers received the perquisites and other benefits described in the following table.

Perquisite
  Description
 
Executive Physical   Each executive is entitled to the annual reimbursement of up to $2,500 for the cost of a comprehensive physical examination.
Airline Membership   Each executive is entitled to Chairman's Preferred Status at US Airways.
Personal Travel on Corporate Aircraft   Ms. Good may use corporate aircraft for personal travel in North America. With advance approval from the Chief Executive Officer, the other named executive officers may use the corporate aircraft for personal travel in North America. If Ms. Good or any other named executive officer uses the aircraft for personal travel, he or she must reimburse Duke Energy the direct operating costs for such travel. However, Ms. Good is not required to reimburse Duke Energy for the cost of travel to the executive physical described above or to meetings of the board of directors of other companies on whose board she serves. For additional information on the use of the corporate aircraft, see footnote 5 to the Summary Compensation Table.
Financial Planning and Tax Preparation Services   Each year, we reimburse each participating executive for expenses incurred for tax and financial planning services. This program is administered on a three-year cycle, such that participating executives can be reimbursed for up to $15,000 of eligible expenses during the three-year cycle.
Matching Charitable Contributions   The Duke Energy Foundation, independent of Duke Energy, maintains The Duke Energy Foundation Matching Gifts Program under which employees are eligible for matching contributions of up to $5,000 per calendar year to qualifying institutions.
 

Severance

Employment Agreement with Ms. Good. Effective July 1, 2013, Ms. Good was appointed President and Chief Executive Officer. Duke Energy entered into an employment agreement with Ms. Good that contains a three-year initial term and automatically renews for additional one-year periods at the end of the initial term unless either party provides 120 days advance notice. In the event of a change in control of Duke Energy, the term automatically extends to a period of two years.

Upon a termination of Ms. Good's employment by Duke Energy without "cause" or by Ms. Good for "good reason" (each as defined in her employment agreement), the following severance payments and benefits would be payable: (i) a lump-sum payment equal to a pro rata amount of her annual bonus for the portion of the year that the termination of employment occurs during which she was employed, determined based on the actual achievement of performance goals; (ii) a lump-sum payment equal to 2.99 times the sum of her annual base salary and target annual bonus opportunity; (iii) continued access to medical and dental benefits for 2.99 years, with monthly amounts relating to Duke Energy's portion of the costs of such coverage paid by Duke Energy (reduced by coverage provided by future employers, if any) and a lump-sum payment equal to the cost of basic life insurance coverage for 2.99 years; (iv) one year of outplacement services; (v) if termination occurs within 30 days prior to, or two years after, a change in control of Duke Energy, vesting in unvested retirement plan benefits that would have vested during the two years following the change in control, and a lump-sum payment equal to the maximum contributions and allocations that would have been made or allocated if she had remained employed for an additional 2.99 years; and (vi) 2.99 additional years of vesting with respect to equity awards and an extended period to exercise outstanding vested stock options following termination of employment.

Ms. Good is not entitled to any form of tax gross-up in connection with Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code"). Instead, in the event that the severance payments or benefits otherwise would constitute an "excess parachute payment" (as defined in Section 280G of the Code), the amount of payments or benefits would be reduced to the maximum level that would not result in an excise tax under Section 4999 of the Code if such reduction would cause Ms. Good to retain an after-tax amount in excess of what would be retained if no reduction were made.

Severance Plan. The Executive Severance Plan provides varying levels of severance protection to the named executive officers other than Ms. Good. The Compensation Committee believes that this plan is appropriate in order to provide a consistent approach to executive severance and to provide eligible executives with certainty and security while they are focusing on their duties and responsibilities. Severance payments and benefits would only be paid in the event that an eligible executive's employment is involuntarily terminated without "cause" or is voluntarily terminated for "good reason," and are subject to compliance with restrictive covenants (e.g., noncompetition). The severance payments and benefits that would be paid in the event of a qualifying termination of employment to those senior executives who are identified as "Tier I Participants," including Messrs. Young, Manly and Jamil, generally approximate two times their annual compensation and benefits. The Executive Severance Plan prohibits the payment of severance if an executive also would be entitled to severance payments and benefits under a separate agreement or plan maintained by Duke Energy, including the change in control agreements described below. The Executive Severance

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Plan does not provide for golden parachute excise tax gross-up payments. The benefit levels under the Executive Severance Plan are described in more detail under the "Potential Payments Upon Termination or Change in Control" section of this proxy statement.

Change in Control Agreements. Duke Energy has entered into Change in Control Agreements with the named executive officers other than Ms. Good. Under these agreements, each such named executive officer would be entitled to certain payments and benefits if (1) a change in control were to occur and (2) within two years following the change in control, (a) Duke Energy terminated the executive's employment without "cause" or (b) the executive terminates his employment for "good reason." The severance protection provided by Duke Energy is generally two times the executive's annual compensation and benefits and becomes payable only if there is both a change in control and a qualifying termination of employment. The Compensation Committee approved the two times severance multiplier after consulting with its advisors and reviewing the severance protection provided by peer companies. The Compensation Committee believes that the protection provided through these severance arrangements is appropriate in order to diminish the uncertainty and risk to the executives' roles in the context of a potential or actual change in control. The benefit levels under the Change in Control Agreements are described in more detail under the "Potential Payments Upon Termination or Change in Control" section on page 62 of this proxy statement. The Change in Control Agreements do not provide for golden parachute excise tax gross-up payments.

Severance Protection for Mr. Yates. In connection with the merger with Progress Energy, Duke Energy assumed the Progress Energy, Inc. Management Change-In-Control Plan ("MCICP"), which provides the following severance protection to Mr. Yates in the event that, within two years of a change in control of Progress Energy (which included its merger with Duke Energy), there is an involuntary termination of the participant's employment without "cause" or the participant voluntarily terminates employment for "good reason": (1) 300% of base salary and the greater of the participant's average STI payment over the prior three years or his target STI payment, (2) up to three years' of continued health and welfare benefits, (3) 100% of the participant's target STI for the year of the termination, (d) full vesting of outstanding stock awards and (e) the participant shall be deemed to have met the minimum service requirements under the Progress Energy Supplemental Senior Executive Retirement Plan. The MCICP also provides a gross-up for golden parachute excise taxes. As indicated above, Duke Energy does not provide excise tax gross-ups for severance benefits provided under its change in control agreements or under its Executive Severance Plan, but as a result of the Progress Energy merger, we assumed the MCICP, which was adopted by Progress Energy prior to the merger and which provides golden parachute tax gross-up payments under certain circumstances. This plan will terminate pursuant to its terms on July 2, 2014, which is the second anniversary of the merger of Duke Energy and Progress Energy. Mr. Yates was provided a retention agreement on July 9, 2012 under which he will be entitled to $1,000,000 subject to him remaining continuously employed with Duke Energy until the second anniversary of the Progress Energy merger (i.e. July 2, 2014). Once earned, this amount will be credited to an unfunded account under the Executive Savings Plan, which will be adjusted with earnings and losses and will be paid in monthly installments over the seven-year period following Mr. Yates' termination of employment.

Retirement of Mr. Rogers. Effective July 1, 2013, Mr. James E. Rogers retired as President and Chief Executive Officer of Duke Energy, and effective December 31, 2013, Mr. Rogers retired as the Chairman (and a member) of the Board of Directors. Pursuant to the terms of his employment agreement, Mr. Rogers' then outstanding stock awards will continue to vest as if he remained employed, with the number of performance shares determined based on actual performance compared to previously established performance measures. For transition purposes, Duke Energy has agreed to provide Mr. Rogers with office space and administrative support for a period of three years after retirement.

Shareholder Approval Policy for Severance Agreements. The Compensation Committee has established a policy pursuant to which it generally will seek shareholder approval for any future agreement with certain individuals (e.g., a named executive officer) that provides severance benefits in excess of 2.99 times the sum of the executive's base salary and annual bonus, plus the value of continued participation in welfare, retirement and equity compensation plans determined as if the executive remained employed for 2.99 additional years. Under the policy, Duke Energy also will seek shareholder approval of any such agreement that provides for the payment of any tax gross-ups by reason of the executive's termination of employment, including reimbursement of golden parachute excise taxes.

Compensation Advisors


Compensation Committee Advisors

The Compensation Committee has engaged Frederic W. Cook & Company, Inc. to report directly to the Compensation Committee as its independent compensation consultant. The compensation consultant generally attends each Compensation Committee meeting and provides advice to the Compensation Committee at the meetings, including reviewing and commenting on market compensation data used to establish the compensation of the executive officers and directors, the terms and performance goals applicable to incentive plan awards and analysis with respect to specific projects and information regarding trends and competitive practices. The consultant has been instructed that it is to

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provide completely independent advice to the Compensation Committee and is not permitted to provide any services to Duke Energy other than at the direction of the Compensation Committee. With the consent of the Chair of the Compensation Committee, the consultant may meet with management to discuss strategic issues with respect to executive compensation and assist the consultant in its engagement with the Compensation Committee. The Compensation Committee has assessed the independence of Frederic W. Cook & Company, Inc. pursuant to SEC rules and concluded that no conflict of interest exists that would prevent the consulting firm from independently advising the Compensation Committee.

Additional Compensation Matters


Consideration of Results of Shareholder Advisory Votes on Executive Compensation

As required by the Dodd-Frank Act, we included a shareholder vote on executive compensation in last year's proxy statement. Because our shareholders supported the compensation of our named executive officers as disclosed in the 2013 proxy statement (i.e., 78% of the votes represented in person or by proxy), the Compensation Committee views the results of this advisory vote as confirmation that our compensation program, including our emphasis on pay-for-performance, is structured and designed to achieve our stated goals and objectives. As a result, we have continued to emphasize pay-for-performance alignment, and our 2013 compensation program, as previously described, continues to reflect this philosophy.

Risk Assessment of Compensation Policies and Practices

In consultation with the Compensation Committee, members of management from Duke Energy's Human Resources, Legal and Risk Management groups assessed whether our compensation policies and practices encourage excessive or inappropriate risk-taking by our employees, including employees other than our named executive officers. This assessment included a review of the risk characteristics of Duke Energy's business and the design of our incentive plans and policies.

Management reported its findings to the Compensation Committee, and after review and discussion, the Compensation Committee concluded that our plans and policies do not encourage excessive or inappropriate risk-taking. Although a significant portion of our executive compensation program is performance-based, the Compensation Committee has focused on aligning Duke Energy's compensation policies with the long-term interests of Duke Energy and avoiding rewards that could create unnecessary risks to the Company, as evidenced by the following:

We do not use highly leveraged STI goals, but instead the STI opportunities are based on balanced performance metrics that promote long-term goals, and all payouts are capped at a pre-established percentage of the target payment opportunity.

Our LTI opportunities generally vest over a period of three years in order to focus our executives on long-term performance and enhance retention. Our performance shares are granted annually and have overlapping three-year performance periods, so any inappropriate risks taken to increase the payout under one award could jeopardize the potential payouts under other awards.

We use a variety of performance metrics (i.e., adjusted diluted EPS, O&M expense, reliability, safety, and TSR) that correlate to long-term value, and our performance goals are set at levels that we believe are reasonable in light of past performance and market conditions.

Our stock ownership policy requires the members of our Executive Leadership Team, including our named executive officers, to hold a minimum level of Duke Energy shares so that each executive has personal wealth tied to the long-term success of Duke Energy and is therefore aligned with shareholders.

We maintain a "clawback policy," which allows Duke Energy to require the reimbursement of any incentive compensation, the payment of which was predicated upon the achievement of financial results that were subsequently the subject of a restatement caused or partially caused by the recipient's fraud or misconduct. It also entitles us to recover inadvertent payments based on an incorrect calculation.

Tax and Accounting Implications

Deductibility of Executive Compensation. The Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Code, which provides that Duke Energy generally may not deduct, for federal income tax purposes, annual compensation in excess of $1 million paid to certain employees. Performance-based compensation paid pursuant to shareholder approved plans is not subject to the deduction limit as long as such compensation is approved by "outside directors" within the meaning of Section 162(m) of the Code and certain other requirements are satisfied.

Although the Compensation Committee generally intends to structure and administer executive compensation plans and arrangements so that they will not be subject to the deduction limit of Section 162(m) of the Code, the Compensation Committee may, from time to time, approve payments that cannot be deducted in order to maintain flexibility in structuring appropriate compensation programs in the interests of

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shareholders. For example, restricted stock unit awards received by certain employees, and amounts paid to certain employees under the STI Plan with respect to individual objectives, may not be deductible for federal income tax purposes, depending on the amount and other types of compensation received by such employees.

Accounting for Stock-Based Compensation. Stock-based compensation represents costs related to stock-based awards granted to employees. Duke Energy recognizes stock-based compensation based upon the estimated fair value of the awards, net of estimated forfeitures at the date of issuance. The recognition period for these costs begins at either the applicable service inception date or grant date and continues throughout the requisite service period or, for certain share-based awards, until the employee becomes retirement eligible, if earlier. Compensation cost is recognized as expense or capitalized as a component of property, plant and equipment.

Non-GAAP Financial Measures. As described previously in this Compensation Discussion and Analysis, Duke Energy uses various financial measures, including adjusted diluted EPS and O&M expense, in connection with short-term and long-term incentives. Adjusted diluted EPS is a non-GAAP financial measure as it represents diluted EPS from continuing operations attributable to Duke Energy common shareholders, adjusted for the per share impact of special items and the mark-to-market impacts of economic hedges related to certain generation assets in the Commercial Power segment. Duke Energy's management also uses adjusted diluted EPS as a measure to evaluate operations of the Company. The O&M expense measure used for incentive plan purposes also is a non-GAAP financial measure as it represents GAAP O&M adjusted primarily for expenses recovered through rate riders, certain regulatory accounting deferrals, and applicable special items. Special items represent certain charges and credits that management believes will not be recurring on a regular basis, although it is reasonably possible such charges and credits could recur. The impact of an asset impairment is a special item that generally is excluded from adjusted EPS. Mark-to-market adjustments reflect the mark-to-market impact of derivative contracts, which is recognized in GAAP earnings immediately as such derivative contracts do not qualify for hedge accounting or regulatory accounting treatment, used in Duke Energy's hedging of a portion of the economic value of its generation assets in the Commercial Power segment. The economic value of the generation assets is subject to fluctuations in fair value due to market price volatility of the input and output commodities (e.g., coal, power) and, as such, the economic hedging involves both purchases and sales of those input and output commodities related to the generation assets. Because the operations of the generation assets are accounted for under the accrual method, management believes that excluding the impact of mark-to-market changes of the economic hedge contracts from adjusted earnings until settlement better matches the financial impacts of the hedge contract with the portion of the economic value of the underlying hedged asset. The most directly comparable GAAP measures for adjusted diluted EPS and O&M expense measures used for incentive plan purposes are reported diluted EPS from continuing operations attributable to Duke Energy Corporation common shareholders and reported O&M expense from continuing operations, which include the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment.

For purposes of the LTI program, adjusted ROE is calculated based on the average of the annual adjusted ROE, with equity determined on a quarterly basis, earned by Duke Energy during the applicable performance period with each annual adjusted ROE being calculated by dividing adjusted net income by average shareholders' equity, which is calculated by reference to shareholders' equity as reported on Duke Energy's consolidated balance sheet, excluding goodwill. Under this calculation, adjusted net income is determined in a manner similar to the methodology used for calculating adjusted diluted EPS for purposes of the STI Plan.

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SUMMARY COMPENSATION TABLE

The following table provides compensation information for our Chief Executive Officer (Ms. Good), our Chief Financial Officer (Mr. Young) and the three other most highly compensated executive officers who were employed on December 31, 2013 (Messrs. Manly, Jamil and Yates). The table also provides compensation information for Mr. Rogers, who served as our Chief Executive Officer for a portion of 2013. The table provides information for 2011 and 2012 only to the extent that each named executive officer was included in the Duke Energy Summary Compensation Table for those years.

Name and Principal Position
  Year
  Salary
($)

  Bonus
($)

  Stock
Awards
($)(1)

  Option
Awards
($)(2)

  Non-Equity
Incentive Plan
Compensation
($)(3)

  Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(4)

  All Other
Compensation
($)(5)

  Total
($)

 
Lynn J. Good(6)   2013   929,167     0   4,177,007   0     1,103,411     87,825     175,600   6,473,010
Vice Chairman, President,   2012   617,500     0   1,220,361   0     648,401     523,790     76,515   3,086,567
and Chief Executive Officer   2011   595,833     0   1,213,768   0     495,545     187,708     84,317   2,577,171
 
Steven K. Young(7)   2013   409,764     0   404,173   0     265,840     66,558     36,834   1,183,169
Executive Vice President and                                            
Chief Financial Officer                                            
 
James E. Rogers(8)   2013   0     0   6,727,407   1,600,002     0     311,187     916,620   9,555,216
Former Chairman, President   2012   0     0   6,373,023   1,600,000     0     388,257     369,229   8,730,509
and Chief Executive Officer   2011   0     0   6,439,381   1,600,001     0     328,742     412,134   8,780,258
 
Marc E. Manly   2013   600,000     0   1,452,121   0     494,256     329,909     134,391   3,010,677
Executive Vice President and   2012   600,000     0   1,190,573   0     626,165     528,654     201,381   3,146,773
President, Commercial Businesses   2011   600,000     0   1,213,768   0     499,010     384,160     130,172   2,827,110
 
Dhiaa M. Jamil   2013   633,333     0   1,573,043   0     528,048     145,665     77,126   2,957,215
Executive Vice President and   2012   537,500     0   1,041,760   0     558,004     192,123     90,821   2,420,208
President, Duke Energy Nuclear   2011   520,833     0   1,062,092   0     415,669     135,802     68,619   2,203,015
 
Lloyd M. Yates   2013   559,673     0   1,367,408   0     497,126     59,944     177,764   2,661,915
Executive Vice President,                                            
Regulated Utilities                                            
 

(1)

This column does not reflect the value of stock awards that were actually earned or received by the named executive officers during each of the years listed above. Rather, as required by applicable SEC rules, this column reflects the aggregate grant date fair value of the performance shares (based on the probable outcome of the performance conditions as of the date of grant) and restricted stock units granted to our named executive officers in the applicable year. The aggregate grant date fair value of the performance shares granted in 2013 to Ms. Good and Messrs. Young, Rogers, Manly, Jamil and Yates, assuming that the highest level of performance would be achieved, is $4,868,108; $467,598; $7,590,023; $1,680,064; $1,819,943; and $1,582,066, respectively. The aggregate grant date fair value of the awards was determined in accordance with the accounting guidance for stock-based compensation. See Note 20 of the Consolidated Financial Statements contained in our Annual Report for an explanation of the assumptions made in valuing these awards.

(2)

This column does not reflect the value of shares that were actually acquired upon the exercise of stock options by Mr. Rogers during each of the years listed above. Rather, as required by applicable SEC rules, this column reflects the aggregate grant date fair value of the stock options granted to Mr. Rogers in the applicable year. The aggregate grant date fair value was determined in accordance with the accounting guidance for stock-based compensation. See Note 20 of the Consolidated Financial Statements contained in our Annual Report for an explanation of the assumptions made in valuing these awards.

(3)

With respect to the applicable performance period, this column reflects amounts payable under the Duke Energy Corporation Executive Short-Term Incentive Plan. Unless deferred, the 2013 amounts were paid in March 2014.

52    DUKE ENERGY – 2014 Proxy Statement


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EXECUTIVE COMPENSATION

(4)

This column includes the amounts listed below. The amounts listed were earned over the 12-month period ending on December 31, 2013.

 
  Good
($)

  Young
($)

  Rogers
($)

  Manly
($)

  Jamil
($)

  Yates
($)

 

Change in Actuarial Present Value of Accumulated Benefit Under:

                       

Duke Energy Retirement Cash Balance Plan

  22,698   25,868   (74,710 ) 13,704   29,459   0

Duke Energy Executive Cash Balance Plan

  65,127   40,690   0   316,205   116,206   39,422

Progress Energy Pension Plan

  0   0   0   0   0   20,522

Above-Market Interest Earned on Amounts Deferred Under the Deferred Compensation Agreement for Mr. Rogers

  0   0   311,187   0   0   0
 

Total

  87,825   66,558   311,187 * 329,909   145,665   59,944
 

*

As required by applicable SEC rules, the decrease in the actuarial present value of Mr. Rogers' benefit under the Duke Energy Retirement Cash Balance Plan is disregarded when determining the total for this column.

(5)

The All Other Compensation column includes the following for 2013:


 
  Good
($)

  Young
($)

  Rogers
($)

  Manly
($)

  Jamil
($)

  Yates
($)

 

Matching Contributions Under the Duke Energy Retirement Savings
Plan/Progress Energy 401(k)

  15,300   15,300   0   15,300   15,300   15,300

Make-Whole Matching Contribution Credits Under the Duke Energy Corporation Executive Savings Plan

  79,354   20,099   0   58,270   56,180   19,588

Personal Use of Airplane*

  61,298   0   333,575   42,421   0   78,393

Airline Membership

  0   0   0   0   0   0

Residential Thermostat Device

  250   0   0   250   250   250

Charitable Contributions Made in the Name of the Executive**

  5,000   400   5,000   5,000   5,000   0

Executive Physical Exam Program

  0   0   1,122   2,500   0   1,650

Financial Planning Program

  5,900   1,035   0   10,650   396   8,000

Relocation Expenses

  0   0   0   0   0   54,583

Legal Fees

  8,498   0   0   0   0   0

Vacation Payout***

  0   0   576,923   0   0   0
 

Total

  175,600   36,834   916,620   134,391   77,126   177,764
 

*

Regarding use of corporate aircraft, named executive officers are required to reimburse Duke Energy the direct operating costs of any personal travel. With respect to flights on a leased or chartered airplane, direct operating costs equal the amount that the third party charges Duke Energy for such trip. With respect to flights on the Company-owned airplane, direct operating costs include the amounts permitted by the Federal Aviation Regulations for non-commercial carriers. Named executive officers are permitted to invite their spouse or other guests to accompany them on business trips when space is available; however, in such events, the named executive officer is imputed income in accordance with IRS guidelines. The additional cost included in the table above is the amount of the IRS-specified tax deduction disallowance, if any, plus any additional carbon credits purchased with respect to the named executive officer's personal travel.

**

Certain charitable contributions made by the named executive officers are not eligible for matching under the Matching Gifts Program and therefore are not listed above. Mr. Yates was not eligible for the Matching Gifts Program in 2013.

***

Mr. Rogers' employment agreement grandfathered his right to payment of accrued unused vacation under a program previously maintained by Cinergy Corp.

(6)

Effective July 1, 2013, Ms. Good became Vice Chairman, President and Chief Executive Officer. Prior to her promotion, she served as Executive Vice President and Chief Financial Officer.

(7)

Effective August 6, 2013, Mr. Young became Executive Vice President and Chief Financial Officer. Prior to his promotion, he served as Vice President, Chief Accounting Officer and Controller.

(8)

Mr. Rogers retired effective December 31, 2013. He did not receive salary or bonus from Duke Energy during 2011-2013. As previously described, he was covered under an employment agreement with Duke Energy that provided compensation primarily through stock-based awards.

DUKE ENERGY – 2014 Proxy Statement    53


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EXECUTIVE COMPENSATION

GRANTS OF PLAN-BASED AWARDS

 
   
   
   
   
   
   
   
   
  All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)(3)

  All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(4)

   
  Grant
Date Fair
Value of
Stock
and
Option
Awards
($)(6)

 
 
   
   
  Estimated Possible
Payouts Under Non-Equity
Incentive Plan Awards(1)
  Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
   
 
 
   
   
  Exercise
or Base
Price of
Option Awards
($/Sh)(5)

 
Name
  Grant Type
  Grant
Date

  Threshold
($)

  Target
($)

  Maximum
($)

  Threshold
(#)

  Target
(#)

  Maximum
(#)

 
   
Lynn J. Good   Cash Bonus         481,333   1,013,333     1,862,000                                          
Lynn J. Good   Long-Term Perf. Shares   2/25/2013                     6,837   13,674     27,348                       1,228,609  
Lynn J. Good   Long-Term Perf. Shares   8/26/2013                     10,773   21,546     43,092                       1,935,908  
Lynn J. Good   Restricted Stock Units   2/25/2013                                     5,860                 404,985  
Lynn J. Good   Restricted Stock Units   8/26/2013                                     9,234                 607,505  
Steven K. Young   Cash Bonus         117,894   248,198     456,064                                          
Steven K. Young   Long-Term Perf. Shares   2/25/2013                     1,692   3,383     6,766                       303,963  
Steven K. Young   Restricted Stock Units   2/25/2013                                     1,450                 100,210  
James E. Rogers   Annual Performance Shares   2/25/2013                     13,746   28,939     57,733                       1,999,974  
James E. Rogers   Long-Term Perf. Shares   2/25/2013                     17,364   34,727     52,091                       2,727,459  
James E. Rogers   Restricted Stock Units   2/25/2013                                     28,939                 1,999,974  
James E. Rogers   Options   2/25/2013                                           310,078     69.11     1,600,002  
Marc E. Manly   Cash Bonus         228,000   480,000     882,000                                          
Marc E. Manly   Long-Term Perf. Shares   2/25/2013                     6,078   12,155     24,310                       1,092,127  
Marc E. Manly   Restricted Stock Units   2/25/2013                                     5,209                 359,994  
Dhiaa M. Jamil   Cash Bonus         240,667   506,667     931,000                                          
Dhiaa M. Jamil   Long-Term Perf. Shares   2/25/2013                     6,584   13,167     26,334                       1,183,055  
Dhiaa M. Jamil   Restricted Stock Units   2/25/2013                                     5,643                 389,988  
Lloyd M. Yates   Cash Bonus         220,955   465,169     854,748                                          
Lloyd M. Yates   Long-Term Perf. Shares   2/25/2013                     5,723   11,446     22,892                       1,028,423  
Lloyd M. Yates   Restricted Stock Units   2/25/2013                                     4,905                 338,985  
   

(1)

Reflects the STI opportunity granted to our named executive officers (other than Mr. Rogers) in 2013 under the Duke Energy Corporation Executive Short-Term Incentive Plan. The information included in the "Threshold," "Target" and "Maximum" columns reflects the range of potential payouts under the plan established by the Compensation Committee. The actual amounts earned by each executive under the terms of such plan are disclosed in the Summary Compensation Table.

(2)

Reflects the performance shares granted to our named executive officers in 2013 under the Duke Energy Corporation 2010 Long-Term Incentive Plan. The information included in the "Threshold," "Target" and "Maximum" columns reflects the range of potential payouts under the plan established by the Compensation Committee. Earned performance shares will be paid following the end of the 2013-2015 performance period (or, with respect to Mr. Rogers, following the 2013 and 2013-2015 performance periods), based on the extent to which the performance goals have been achieved. Any shares not earned are forfeited. In addition, following a determination that the performance goals have been achieved, participants will receive a cash payment equal to the amount of cash dividends paid on one share of Duke Energy common stock during the performance period multiplied by the number of performance shares earned.

(3)

Reflects the restricted stock units granted to our named executive officers in 2013 under the Duke Energy Corporation 2010 Long-Term Incentive Plan. The restricted stock units generally vest in equal portions on each of the first three anniversaries of the grant date, provided the recipient continues to be employed by Duke Energy on each vesting date. The restricted stock units granted to Ms. Good on August 26, 2013, will vest on the first three anniversaries of February 25, 2013. The restricted stock units granted to Mr. Rogers vested ratably in four equal quarterly installments following the grant. If dividends are paid during the vesting period, then the participants will receive a current cash payment equal to the amount of cash dividends paid on one share of Duke Energy common stock during the vesting period multiplied by the number of unvested restricted stock units.

(4)

Reflects the number of shares that may be issued to Mr. Rogers on exercise of the stock option granted in 2013 under the Duke Energy Corporation 2010 Long-Term Incentive Plan. As a result of Mr. Rogers' retirement on December 31, 2013, this option will continue to vest in three equal annual installments on January 1, 2014, January 1, 2015 and January 1, 2016, in accordance with its terms.

(5)

Reflects the exercise price for the stock option granted to Mr. Rogers in 2013, which equals the fair market value of the underlying shares on the date of grant.

(6)

Reflects the grant date fair value of each restricted stock unit, performance share (based on the probable outcome of the performance conditions as of the date of grant) and stock option award granted to our named executive officers in 2013, as computed in accordance with the accounting guidance for stock-based compensation.

54    DUKE ENERGY – 2014 Proxy Statement


Table of Contents

EXECUTIVE COMPENSATION

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table shows the outstanding equity awards held by our named executive officers as of December 31, 2013. Pursuant to the terms of the merger agreement with Progress Energy, Duke Energy was required to assume the Progress Energy equity awards that were granted prior to the merger and convert them to Duke Energy equity awards of equivalent value and with the same terms and conditions.

 
  Option Awards   Stock Awards  
Name
  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable

  Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(1)

  Option
Exercise
Price
($)

  Option
Expiration
Date

  Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)

  Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)

  Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)(3)

  Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)

 
   

Lynn J. Good

    0                                            

Lynn J. Good

                            21,210     1,463,702              

Lynn J. Good

                                        10,217     705,041  

Lynn J. Good

                                        6,811     470,027  

Lynn J. Good

                                        70,440     4,861,064  

Steven K. Young

    0                                            

Steven K. Young

                            3,029     209,031              

Steven K. Young

                                        2,642     182,290  

Steven K. Young

                                        1,761     121,527  

Steven K. Young

                                        6,766     466,922  

James E. Rogers

    0     119,314     53.94     2/22/2021                          

James E. Rogers

    0     226,468     63.21     2/27/2022                          

James E. Rogers

    0     310,078     69.11     2/25/2023                          

James E. Rogers

                            0     0              

James E. Rogers

                                        28,477     1,965,181  

James E. Rogers

                                        18,985     1,310,120  

James E. Rogers

                                        52,091     3,594,765  

Marc E. Manly

    0                                            

Marc E. Manly

                            11,230     774,982