Compensation Committee

I. Purpose

The purpose of the Compensation Committee (Committee) of South Jersey Industries, Inc.
(Company) is to carry out the responsibilities delegated by the Board of Directors relating to the
review and determination of executive compensation for the CEO and the Executive Officers, as well
as the structure and performance of significant, long-term employee defined benefits and defined
contribution plans. Consistent with this function, the Committee should encourage continuous
improvement of, and adherence to the Company's policies, procedures and practices at all levels.

II. Composition

The Committee shall comprise a minimum of three Directors as determined by the Board, each of
whom shall be independent directors as defined by the rules of the New York Stock Exchange,
outside directors within the meaning of the Internal Revenue Code, and “non-employee directors”
as defined in Rule 16b-3 under the Securities Exchange Act, and free from any relationship that, in
the opinion of the Board, would interfere with the exercise of his or her independent judgment as a
member of the Committee. Pursuant to the Company’s Bylaws and this Charter, the NonExecutive
Chairman shall be an ex-officio member of the Committee. The quorum is one-third of the entire
authorized number of members, but no fewer than two persons. The members of the Committee
and Committee Chair shall be recommended by the Governance Committee, elected by the Board at
the annual organizational meeting and shall serve until their successors shall be duly elected.

III. Meetings

The Committee will meet at least four times a year, with authority to convene additional meetings,
as circumstances require. All Committee members are expected to attend each meeting, in person
or via telephone or video conference. The Committee will invite members of management, outside
professionals, or others to attend meetings and provide pertinent information as necessary and at
the sole discretion of the Committee. The Committee will meet in executive session attended by the
Committee members or other Independent Directors at the invitation of the Committee Chairman.
Meeting agendas will be prepared and provided in advance to members, along with appropriate
briefing materials. Minutes will be prepared. The Committee will undergo an annual performance
evaluation which may be conducted by the Committee itself or an outside party.

IV. Responsibilities

A. Compensation

  1. Executive Compensation Program
    • Oversee, develop and administer an executive compensation and benefit program for Executive Officers which is competitive, ensures that the interests of the Executive Officers are aligned with the interests of shareholders, ensures the company’s ability to attract and retain qualified executive talent, and, which strikes a proper balance between compensation and corporate growth
    • Review and recommend to the Board the philosophy, objectives and structure of the Company’s executive compensation program. Review peer group for competitive comparison purposes and modify as appropriate
    • In evaluating and making recommendations regarding executive compensation, the Committee shall consider the results of the most recent Say on Pay Vote
  2. Incentive Compensation Plans
    • Review, approve and recommend to the Board, incentive compensation plans and equity-based plans for all Executive Officers; adopt, amend and terminate such plans
    • Ensure appropriate overall corporate performance measures and goals are set and determine the extent that established goals have been achieved and any related compensation earned by Executive Officers
    • Ensure that the Company’s compensation plans are administered consistent with the terms of the plans
  3. Stock Ownership
    • Monitor compliance with any stock ownership guidelines and holding periods for all Executive Officers
  4. CEO Compensation and Performance Review
    • Annually review, approve and recommend to the Board (with other Board members that satisfy the applicable independence requirements under the listing standards of the New York Stock Exchange) the corporate goals and objectives applicable to the compensation of the Chief Executive Officer (CEO)
    • Annually, approve and recommend to the Board (with other Board members that satisfy the applicable independence requirements under the listing standards of the New York Stock Exchange) the CEO’s compensation components
    • Annually, prepare, maintain and recommend to the Board (with other Board members that satisfy the applicable independence requirements under the listing standards of the New York Stock Exchange) a CEO evaluation process and facilitate the effective completion of that process
    • Annually review, approve and recommend to the Board (with other Board members that satisfy the applicable independence requirements under the listing standards of the New York Stock Exchange) the compensation level of the CEO of the Company based upon its evaluation of the CEO’s performance.
  5. Executive Officer Compensation
    • Review and approve compensation levels and design on an annual basis
    • Review and approve incentive plan design on an annual basis
    • Review and approve indirect compensation, including perquisites and other non-cash compensation tri-annually or more frequently as necessary
    • Review and recommend to the Board compensation adjustments
  6. Other Officer Compensation
    • Review compensation and any adjustments approved by the CEO, including perquisites and other non-cash compensation
    • Annually review and make recommendations to the Board regarding the CEO discretionary award program
  7. Required Compensation Disclosure
    • Produce an annual written report to shareholders on executive compensation (Compensation Discussion and Analysis) for the annual proxy statement in compliance with, and to the extent required by applicable Securities and Exchange Commission (SEC) rules and regulations
  8. Executive Officer Agreements
    • Review, approve and make recommendations to the Board regarding any employment agreements and any severance arrangements or plans, including any benefits to be provided in connection with a change in control, which includes the ability to adopt, amend and terminate such agreements, arrangements or plans
    • Review, approve and recommend to the Board any proposed waivers allowable under executive plans (SERP, deferred compensation, etc.) or executive agreements (i.e. Severance/general release agreements; restricted stock agreements; etc.)
  9. Stock Ownership Guidelines
    • Review and recommend to the Board the guidelines for stock ownership by the Company’s Officers and on an annual basis, review compliance with the guidelines
  10. Employee Retirement Benefit Plans
    • Oversee the management of the assets of the Company’s Plans (Pension, Voluntary Employee Beneficiary Associations (VEBAs), Rabbi Trust, Employee Stock Ownership Plan, SERP and other retirement plans, (Plans) related to retirement benefits in a manner which preserves the inflation-adjusted value of the Plans, achieves the optimal return within specified risk tolerances and prudently invests assets in a high-quality, diversified manner. Subordinate tasks include:
      • Review, approve and recommend to the Board annual contributions to the Plans (if any);
      • Establish and approve investment guidelines consistent with the Plans’ purposes and objectives;
      • Review the performance of investment managers/funds annually;
      • Approve any change of Investment Manager(s) or Investment Management Consultant;
      • Review and recommend to the Board proposed ERIPs (Early Retirement Incentive Programs);
      • Review 401 (K) Plan participation and fund performance;
      • Review and recommend to the Board substantive changes to any of the Plans; and
      • Review and recommend to the Board any proposed employee benefit plan termination or the creation of any new plan that inures primarily to the benefit of executives or creates a new financial obligation for the Company
  11. Risk & Compensation
    • On an annual basis, undertake a risk assessment of the Company’s compensation program and determine whether any component of the program is reasonably likely to have a material adverse effect on the Company.
  12. Say on Pay
    • Review and recommend to the Board for approval the frequency with which the Company will conduct Say on Pay Votes, taking into account the results of the most recent stockholder advisory vote on frequency of Say on Pay Votes required by Section 14A of the Exchange Act, and review and approve the proposals regarding the Say on Pay Vote and the frequency of the Say on Pay Vote to be included in the Company's proxy statement
  13. Other Activities
    • Perform other activities consistent with the Charter, the Corporate Bylaws and governing law and rules, as the Committee or Board deems necessary or appropriate.

B. Reporting Responsibilities

  1. Regularly report to the Board on Committee activities, issues, and related recommendations
  2. Review any other reports the Company issues that relate to Committee responsibilities

V. Outside Advisors

Authority to Retain

The Committee may retain or obtain the advice of one or more compensation advisors as necessary to assist with the execution of its duties and responsibilities as set forth in this Charter. This section applies to the retention of compensation consultants, independent legal counsel, and/or other advisors. The Committee will be directly responsible for subordinate tasks including:

  • Appointing advisors, only after conducting an independence assessment;
  • Determining reasonable compensation for the work of any advisors retained by the Committee. The Company shall be responsible for providing appropriate funding, as determined by the Committee, to any compensation advisors retained by the Committee; and
  • Directing the responsibility for oversight of any advisors retained by the Committee.

Evaluating Independence

The Committee, before retaining any advisors, must consider factors affecting his or her independence, including, at minimum:

  • The provision of other services to the Company by the person or entity that employs the compensation consultant, legal counsel or other advisor;
  • The amount of fees received from the Company by the person or entity that employs the compensation consultant, legal counsel or other advisor, as a percentage of the total revenue of the person or entity that employs the compensation consultant, legal counsel or other advisor;
  • The policies and procedures of the person or entity that employs the compensation consultant, legal counsel or other advisor that are designed to prevent conflicts of interest;
  • Any business or personal relationship between the compensation consultant, legal counsel or other advisor and a Committee member;
  • Any business or personal relationship between the compensation consultant, legal counsel or other advisor and an executive officer of the Company; and
  • Any stocks of the Company owned by the compensation consultant, legal counsel or other advisor

While the Committee is required to consider the independence of its advisors, it is not required that such advisors be independent.
The Committee shall not be required to implement or act consistently with the advice or recommendations of its compensation consultants, legal counsel or other advisors to the Committee, and the authority granted in this Charter shall not affect the ability or obligation of the Committee to exercise its own judgment in fulfillment of its duties under this Charter.

VI. Review of Charter

After initial approval of this Charter by Board, the Committee shall review Charter annually and recommend any proposed changes to the Board.

 

Rev. 04.24.20