2018 Guide to Effective Proxies

2.17.1 CD&A table of contents | 257 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES Compensation Discussion and Analysis Compensation Discussion and Analysis In this section, we describe the material components of our executive compensation program for 2017 for named executive officers (“NEOs”), who appear in the Summary Compensation Table and other compensation tables contained in this Proxy Statement. Compensation Discussion and Analysis Table of Contents Section Element Page Highlights 2017 Performance 29 2017 Compensation 29 Compensation Philosophy 29 Executive Compensation Practices 30 Impact of 2017 Say on Pay Vote 30 What We Pay and Why Establishing Target Compensation 31 Peer Group 31 Executive Compensation Elements 32 Mix of Total Compensation 33 Overview of Target Total Compensation for 2017 33 Base Salary 33 Annual Incentive 34 Long-term Incentives 35 Retirement and Deferred Compensation Benefits 37 Additional Compensation Program Features and Policies Severance Policy 37 Employment Contracts 37 Stock Ownership Requirements 37 Equity Grant Practices 38 Hedging and Pledging 38 Recoupment 38 Risk Assessment 39 Deductibility of Executive Compensation under IRC Section 162(m) 39 28 | 2018 Xcel Energy Proxy Statement XCEL ENERGY