Corporate governance overview
• Company overview
• Leadership team
• Governance practices
• Executive compensation program
• Environmental and social performance
2WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
“ Our corporate strategy is to create long-term value by focusing
on the fundamentals: world-class reliability, operating efficiency
and financial discipline. In addition, we keep our customers at the
heart of the business, work every day to help grow and support the
communities we serve, and value and develop our employees who
are making a difference in a mission that matters.”
- Allen Leverett, WEC Energy Group President and CEO
• WEC Energy Group formed when Wisconsin Energy Corp.
acquired Integrys Energy Group in June 2015
• Leading electric and natural gas utility in the Midwest
• Eighth largest natural gas distribution company in the country
• One of the 15 largest investor-owned utility systems in the United States
• More than 99 percent of earnings from regulated operations
• Industry-leading total shareholder returns
Company overview
4WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
WEC Energy Group is formed
Wisconsin Energy Corp. acquired Integrys Energy Group on June 29, 2015. Completed transaction in 53 weeks.
Combined two companies with origins dating back to the 1800s. » More than a century of operating history.
ELECTRIC DISTRIBUTION ELECTRIC TRANSMISSION ELECTRIC GENERATIONNATURAL GAS DISTRIBUTION
Services: electricity,
natural gas and steam
Customers:
1.1 million electric
1.1 million natural gas
Service: natural gas
Customers: 828,000
Service: natural gas
Customers: 171,000
Services: natural gas
and appliance repair
Customers: 230,000
Service: natural gas
Customers: 159,000
Services: electricity
and natural gas
Customers:
450,000 electric
326,000 natural gas
60% ownership
5WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
WEC Energy Group, an energy industry leader
WEC Energy Group is one of the nation’s largest electric and natural gas delivery companies with deep operational expertise, scale
and financial resources to meet the region’s future energy needs. WEC Energy Group is headquartered in Milwaukee, Wisconsin, with
operating headquarters in Green Bay, Wisconsin, and Chicago, Illinois.
• Minnesota Energy Resources
• We Energies
• Wisconsin Public Service
• Michigan Gas Utilities
• North Shore Gas
• Peoples Gas
» Eighth largest natural gas
distribution company in the country
» 44,000
miles of natural gas distribution
» Generating capacity from
diverse portfolio of fuel
including coal, natural gas and
renewables (hydro, wind and biomass)
» 70,400
miles of electric distribution
» Serving 4.4 million customers
» 8,400 employees
Milwaukee, WI
Green Bay, WI
Chicago, IL
6WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
Shareholder returns - track record of performance
Over the past decade, WEC Energy Group has consistently delivered among the best total returns in the industry.
One Year Three Year Five Year Ten Year
300%
250%
200%
150%
100%
50%
0%
254.8%— WEC Energy Group
— Dow Jones Utilities Average
— S&P Utilities Index
— Philadelphia Utility Index
— S&P Electric Index
Annualized returns for periods ending 12/31/15
Source: Bloomberg data assumes all dividends were reinvested and returns were compounded daily
» Company poised for growth
• Long-term earnings per share growth of
5-7 percent projected annually – driven by
multiyear infrastructure projects
• Targeting dividend growth in line with growth
in earnings per share
• Majority ownership of American Transmission Co.
brings additional transmission investment
opportunity
• Positioned to deliver among the best
risk-adjusted returns in the industry
INDUSTRY-LEADING TOTAL SHAREHOLDER RETURNS
• Board is led by non-executive chairman and independent presiding director
• New CEO appointed from within the company, effective May 1, 2016
• Non-executive chairman served as CEO for prior 13 years
• Experienced leadership team, many having worked together for more than 10 years
Leadership team
8WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
WEC Energy Group Board of Directors
The board of directors strategically acted to separate the offices of chief executive officer and chairman of the board as a component
of its management succession planning. The board is now led by a non-executive chairman and a lead independent presiding director.
The average years of service is nine years.
John F. Bergstrom,
director since 1987,
chairman and chief
executive officer,
Bergstrom Corp.
Patricia W. Chadwick,
director since 2006,
president, Ravengate
Partners LLC
Presiding director
Barbara L. Bowles,
director since 1998,
retired vice chair, Profit
Investment Management;
retired chairman, The
Kenwood Group Inc.
Curt S. Culver,
director since 2004,
non-executive chairman,
MGIC Investment Corp.
and Mortgage Guaranty
Insurance Corp.
Allen L. Leverett,
director since 2016,
president and chief
executive officer,
WEC Energy Group
William J. Brodsky,
director since 2015,
chairman, CBOE
Holdings Inc., and the
Chicago Board Options
Exchange
Thomas J. Fischer,
director since 2005,
principal, Fischer
Financial Consulting LLC
Ulice Payne Jr.,
director since 2003,
managing member,
Addison-Clifton LLC
Albert J. Budney Jr.,
director since 2015,
retired president,
Niagara Mohawk
Holdings Inc.
Paul W. Jones,
director since 2015,
retired executive
chairman and chief
executive officer,
A.O. Smith Corp.
Henry W. Knueppel,
director since 2013,
retired chairman and
chief executive officer,
Regal Beloit Corp.
Mary Ellen Stanek,
director since 2012,
managing director
and director of Asset
Management, Baird Financial
Group Inc.; chief investment
officer, Baird Advisors;
president, Baird Funds Inc.
Non-executive chairman
Gale E. Klappa,
director since 2003,
non-executive chairman,
WEC Energy Group
9WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
Allen L. Leverett named chief executive officer effective May 1, 2016
Allen Leverett was named president of WEC Energy Group in June 2015 and chief executive officer in May 2016.
He was appointed to the board of directors in January 2016.
Experience
Leverett had served as president of Wisconsin Energy Corp. since August 2013, as well as president – Wisconsin,
Michigan and Minnesota, with responsibility for business operations of the company’s utilities in those states.
Previously, Leverett served as president and chief executive officer of We Generation, the company’s power
generation group, since March 2011, with overall responsibility for the company’s electric generation portfolio, fuel
procurement, environmental compliance and renewable energy development strategy. He joined Wisconsin Energy
in 2003 as chief financial officer. In May 2004, he was named executive vice president and chief financial officer of
Wisconsin Energy and We Energies.
Prior to joining the company, Leverett served as chief financial officer and executive vice president of Georgia
Power in Atlanta, Georgia. Before that, he was vice president and treasurer of Southern Company Services,
with overall responsibility for financial planning and analysis, capital markets and leasing, treasury and investor
relations. Previously, he held a variety of positions in transmission planning, integrated resource planning, strategic
planning, wholesale marketing and finance.
Education
Leverett earned his bachelor’s degree, summa cum laude, in electrical engineering and mathematics from
Vanderbilt University, Nashville, Tennessee. He also earned a master’s degree in electrical engineering from
Stanford University, Palo Alto, California, and a Master of Business Administration degree with a finance
concentration from Auburn University, Auburn, Alabama.
Board participation
Leverett is a director of American Transmission Co. and non-executive chairman of Church Mutual Insurance Co.
He also is a member of the board of directors of the Electric Power Research Institute (EPRI) and the board of
trustees for Alverno College in Milwaukee.
President and
Chief Executive Officer
10WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
Leadership team
Leverett is supported by a seasoned leadership team. Seven of his 11 direct reports have been with the company more than 10 years.
Kevin Fletcher
President
WI Utilities
Joined company in 2011
Scott Lauber
EVP and Chief
Financial Officer
Joined company in 1990
Joan Shafer
EVP Human Resources
and Org. Effectiveness
Joined company in 1978
Tom Metcalfe
EVP
WI Utilities
Joined company in 2004
Heidi Humbert
VP and Chief
Audit Officer
Joined company in 2002
Charles Matthews
President
IL Utilities
Joined company in 2006
Susan Martin
EVP, General Counsel
and Corp. Secretary
Joined company in 2000
Robert Garvin
EVP
External Affairs
Joined company in 2011
Beth Straka
SVP Communications
and Investor Relations
Joined company in 2015
Jerold Franke
President
Wispark
Joined company in 1988
Pat Keyes
President, MN and MI Utilities
EVP Strategy
Joined company in 2011
• One of the earliest adopters of formal corporate governance guidelines
• Commonsense Principles of Corporate Governance benchmarking
• Regular assessment of board experience and qualifications
incorporated into active succession-planning processes
• Experientially skilled and diverse board of directors focused on
shareholder interests and concerns
Governance practices
12WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
COMMONSENSE PRINCIPLES WEC ENERGY GROUP PRACTICES
Board composition/internal governance ✔
• 11 of 13 independent directors
• Annual election of directors since 2005
• Board committee structure/service evaluated annually
• Stockholders can nominate directors
• Stock ownership requirements
• Balanced director tenure/retirement age at 72
Board responsibilities ✔ • Chairman active in stakeholder communications• Board participation in critical activities, including setting agenda
Shareholder rights ✔
• Proxy access bylaw (under development)
• Dual class voting is not practiced
• Written consent/special meeting provisions
Public reporting ✔
• Transparent quarterly financial results; reported using GAAP
• Quarterly reporting framed in broader context of strategy
• Disclosure of long-term goals is specific and measurable
• Take long-term strategic view and explain how material decisions are consistent with that view
Board leadership ✔ • Separate CEO/chair roles• Presiding independent director
Management succession planning ✔ • Board interaction with and evaluation of senior management• Public disclosure of succession planning process
Management compensation ✔
• Competitively tailored to business and industry, aligned with long-term performance
• Include current and long-term metrics, cash and equity components
• Public disclosure of benchmarks and performance measurements
• Clawback policies for cash and equity
Formal corporate governance guidelines
Since 1996, the board of directors has maintained strong corporate governance guidelines, which it has continued to modify as
governance practices and shareholder expectations have evolved. Our guidelines align with the “Commonsense Principles of Corporate
Governance,” a recommended governance framework that was published by a coalition of companies and investors in July 2016.
13WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
6
OF
6
9
OF
13
11
OF
13
Audit committee
members are
financial experts
new
directors
elected in the
past four years
Directors are
current or
former CEOs
3
6
2
Directors
are
women
Directors are
African
American
Directors are
independent
FINANCIAL E XPERTISE
CEO E XPERIENCE
INDEPENDENCE
DIVERSIT Y TENURE
REFRESHMENT
31%
Female or
ethnically diverse
directors 64.7
9
Average age »
Average years
of service »
Board of directors is experientially skilled and diverse with a balanced tenure
Our directors are assessed annually to ensure that they have the skills, education, experience and qualifications required
to further the success of the company and represent shareholder interests.
14WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
Governance practices evolve with shareholder input
At the May 2016 annual meeting, shareholders approved the board proceeding to adopt a proxy access bylaw.
• Ownership threshold
• Ownership duration
• Nominating group size limit
• Cap (max percent of board)
• Loaned shares count as owned
• Nominee prohibition on third-party
compensation arrangements
• Renomination restrictions on proxy
access nominations
• Nominee ineligibility for failure to
serve director or withdrawal from
election
• Board authority to interpret bylaw
KE Y BYL AW PROVISIONS FOR PROXY ACCESS:
• Includes short- and long-term components
• Program design links pay to performance measures
• Substantial portion of compensation is at risk
• Recent changes to program components as a result of shareholder input
Executive compensation program
16WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
Experienced, independent compensation committee administers the program
• Compensation committee chair has attained the National Association of Corporate Directors top designation of Board Leadership Fellow
• All members of compensation committee are independent
• Compensation committee utilizes the expertise of an independent compensation consultant
Link pay to performance
• Since 2004, annual incentive pay has been strategically linked to key performance measures
• Includes a short-term component and a long-term orientation
• Substantial portion of compensation is at risk and tied to company performance
• Stock is a considerable portion of executive compensation and meaningful stock ownership targets are set for senior executives
Responsive to shareholder interests
• Since 2011, the company has submitted an annual shareholder proposal on an advisory vote on executive compensation of the named
executive officers (“Say-on-Pay”); average approved percentage has been 88.6 percent
• Clawback policy was implemented in December 2014 which provides for the recoupment of incentive-based compensation
• Formal policy was adopted in December 2014 which prohibits any new arrangements that would provide executives with tax-gross ups
moving forward
• Effective in 2015 for annual incentive compensation, cash flow was added as a performance measure, in addition to earnings per share
from continuing operations
• Hedging and pledging of WEC Energy Group common stock is prohibited
• Repricing of stock options without shareholder approval is prohibited
• Equity award and other benefit plan obligations are satisfied through open-market purchases of WEC Energy Group common stock
so as not to dilute the interests of current shareholders
Compensation program design
The company has had a consistent approach to its compensation program, which includes being responsive to shareholder interests and
incorporates industry best practices.
17WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
Compensation incentive program
The company’s executive compensation program is tied to short- and long-term incentives with a substantial portion at-risk.
12%
57%
18%
31%
Annual
base salary
Annual
base salary
Total variable incentive pay 8
8%
Total variable incentive pay 8
2%
Long-term
equity
incentive
51%
Long-term
equity
incentive
CEO 2015 total direct compensation mix Other NEOs 2015 total direct compensation mix
Annual cash
incentive
31%
Annual cash
incentive
12%
57%
18%
31%
Annual
base salary
Annual
base salary
Total variable incentive pay 8
8%
Total variable incentive pay 8
2%
Long-term
equity
incentive
51%
Long-term
equity
incentive
CEO 2015 total direct compensation mix Other NEOs 2015 total direct compensation mix
Annual cash
incentive
31%
Annual cash
incentive
2015 TOTAL DIRECT COMPENSATION MIX
CEO
Long-term equity (57%) breakout
Performance units 57%
Stock options 13%
Restricted stock 30%
OTHER NEOs
Long-term equity (51%) breakout
Performance units 46%
Stock options 14%
Restricted stock 40%
COMPONENT TERMS/CONDITIONS
Annual base salary Annual evaluation takes into consideration level of experience, performance, responsibility and contribution to the
results of the company’s operations.
Annual cash incentive awards
Short-term performance plan Award is based upon level of achievement of pre-established financial and operational targets aligned with shareholder,
customer and employee-focused objectives; all payments are at risk.
Financial targets: Earnings per share, cash flow, net income*
Operational targets: Customer satisfaction, safety, workforce and supplier diversity
(*Net income is a performance metric for utility officers)
Short-term dividend equivalents Payout is contingent on company meeting pre-established performance targets tied to earnings per share
from continuing operations.
Long-term equity incentive awards
Performance units Award is contingent on company’s “total shareholder return” in comparison to a peer group of companies over a three-year
period; exceptional performance versus peers results in higher payouts; substantially lower than peers results in no payout.
Stock options Long-term value is tied to company performance and stock price appreciation following the grant date.
Restricted stock Long-term value is tied to stock price appreciation.
• Balance the delivery of safe, reliable and affordable energy with a commitment to protecting
the environment
• Follow a multi-emission strategy to achieve greater environmental benefit for lower cost
• Goal of reducing CO2 emissions by approximately 40 percent below 2005 levels by 2030
• Strategically link incentive pay and operational goals to social performance targets since 2004
• Developed enhanced ESG disclosures for the newly combined company
• Invest in the communities we serve through charitable giving
Environmental and social performance
19WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
GUIDING PRINCIPLES OF OUR ENVIRONMENTAL COMMITMENT
Practice responsible
environmental
stewardship of all
properties and natural
resources entrusted to
our management.
Support research and implement new
technologies for emissions control,
energy efficiency, renewable energy
resources and other environmental and
health concerns associated with utility
operations.
Meet or surpass environmental
standards, invest in energy
efficiency measures and
support our recycling and
waste-reduction programs.
Participate with government
and other agencies in creating
responsible laws and regulations
to safeguard the environment,
community and workplace.
Board governance and risk management
A strong corporate governance structure supports the company’s strategic focus on environmental issues. Formal mechanisms are in place to provide
regular environmental updates, including on climate change, to the company’s board. The utility subsidiaries’ boards of directors and the board of
WEC Energy Group and its committees regularly receive briefings from internal specialists and external experts on emerging issues, and engage in
thoughtful discussion about the company’s strategy for establishing and achieving environmental performance objectives.
Transparency in reporting
• Wisconsin Energy issued first Corporate Responsibility Report in 2002
• WEC Energy Group 2015 Corporate Responsibility Report published in August 2016
Balancing reliability and customer costs with environmental stewardship
While providing safe, reliable and affordable energy to customers is a responsibility WEC Energy Group takes seriously, we also are focused
on our responsibility and commitment to protecting the environment.
20WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
Supporting a clean energy future
Over the past decade, WEC Energy Group has implemented a multi-emission strategy to achieve greater environmental
benefit for lower cost.
120%
100%
80%
60%
40%
20%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Nitrogen oxides
81% reduction
Sulfur dioxide
88% reduction
Mercury 84% reduction
PERCENTAGE OF REMAINING EMISSIONS
21WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
More than a decade of turning principles into action
• Retired 11 coal-fueled generating units on our system, totaling 652 megawatts (MW).
• Added two combined-cycle natural gas units totaling 1,090 MW that replaced
coal-fueled power generation.
• Converted Port Washington Generating Station from coal to natural gas,
making it the most thermally efficient generating power plant in Wisconsin.
• Converted Valley Power Plant from coal to natural gas, reducing CO2 emission
rate by more than 40 percent.
• Sold Milwaukee County Power Plant, which facilitated its conversion from coal to
natural gas.
• Invested more than $1.5 billion in air quality control systems on a number of existing
coal-fueled power generation units.
• Invested more than $1 billion in renewable energy – including the state's two largest
wind energy sites.
• Less than 30 percent of our revenues come from coal-based generation.
• In 2015, more than 50 percent of the electricity we delivered to our customers
was derived from low-or no-carbon sources such as natural gas, nuclear fuel,
wind farms and hydroelectric facilities.
Looking to the future
• We have piloted technical studies, completed research studies and engaged
with regulators. We will continue to be engaged on GHG emission reductions
on a scientific level.
• Working to develop alternative generation resources to serve the Upper Peninsula of
Michigan, so that we can retire the Presque Isle Power Plant (coal) by end of 2019.
• Continuing evaluation of possible future retirements of other coal-fueled units.
• Received research and test exemptions to evaluate co-firing of natural gas in some of our
coal-fueled units. Testing commenced June 15, 2016.
• As the regulation of GHG emissions takes shape, our plan is to work with our
industry partners, environmental groups, and the State of Wisconsin with a goal of
reducing CO2 emissions by approximately 40 percent below 2005 levels by 2030.
Greenhouse gas emissions
Addressing climate change is an integral component
of our strategic planning process. We will continue to
reshape our portfolio of electric generation facilities
with investments that will improve our environmental
performance, including reduced greenhouse gas (GHG)
intensity of our operating fleet.
2000 2003 2006 2009 2012 2015
120%
100%
80%
60%
40%
20%
0%
Carbon intensity
23% reduction
from 2000 levels
PERCENTAGE OF REDUCTION IN CARBON INTENSIT Y
CO2 rate - lbs/mwh
22WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
Since 2004, WEC Energy Group has strategically linked
management annual incentive compensation to operational
goals that include the following social performance measures:
2015 employee safety*
• Safest year in company history
• Injuries down 85 percent since 2003
2015 customer satisfaction survey results
• Top quartile in Midwest for customer satisfaction
and power quality*
• Top quartile nationally for customer service*
• Ranked number two in Midwest for overall customer
satisfaction^
2015 workplace diversity*
• Leadership diversity: leadership more diverse than service
area demographic for seventh consecutive year
• Supplier diversity: $159 million spent with certified
minority- and women-owned businesses, which is
17.36 percent of the company’s total procurement
spend on operations, maintenance and capital
*We Energies
^Wisconsin Public Service
Supporting communities served by our companies
Our companies provide financial support for nonprofit,
tax-exempt organizations in the communities we serve, while
company employees take an active role in their communities,
serving on nonprofit boards and volunteering their time.
• We Energies Foundation ranks ninth in grants paid and
third in number of grants distributed among the most active
foundations in the Milwaukee area.
Long-standing attention to social performance
Social performance is a way to measure how a company manages relationships with its employees, suppliers, customers and the
communities where it operates.
2015 CHARITABLE CONTRIBUTIONS AREAS OF FOCUS
Education
33%
Human
services
and health
34%
Arts and
culture
16%
13%
4%
Environmental
Community and
neighborhood
development
23WEC ENERGY GROUP | CORPORATE GOVERNANCE OVERVIEW
Much of the information contained in this presentation is forward-looking information based upon management’s current expectations and projections that
involve risks and uncertainties. Forward-looking information includes, among other things, information concerning earnings per share, rate case activity,
earnings per share growth, cash flow, dividend growth and dividend payout ratios, construction costs and capital expenditures, investment opportunities,
corporate initiatives, and rate base. Readers are cautioned not to place undue reliance on this forward-looking information. Forward-looking information is
not a guarantee of future performance and actual results may differ materially from those set forth in the forward-looking information.
In addition to the assumptions and other factors referred to in connection with the forward-looking information, factors that could cause WEC Energy Group’s
actual results to differ materially from those contemplated in any forward-looking information or otherwise affect our future results of operations and
financial condition include, among others, the following: general economic conditions, including business and competitive conditions in the company’s
service territories; timing, resolution and impact of future rate cases and other regulatory decisions; the company’s ability to successfully integrate the
operations of the Integrys companies with its own operations; availability of the company’s generating facilities and/or distribution systems; unanticipated
changes in fuel and purchased power costs; key personnel changes; varying weather conditions; continued industry consolidation; cyber-security
threats; the value of goodwill and its possible impairment; construction risks; equity and bond market fluctuations; the impact of any legislative and
regulatory changes; current and future litigation and regulatory investigations; changes in accounting standards; and other factors described under the
heading “Factors Affecting Results, Liquidity, and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of
Operations and under the headings “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors” contained in WEC Energy Group’s
Form 10-K for the year ended December 31, 2015 and in subsequent reports filed with the Securities and Exchange Commission. WEC Energy Group
expressly disclaims any obligation to publicly update or revise any forward-looking information.
Cautionary Statement Regarding Forward-Looking Information