Constellation Energy (CEG) DEF 14ADefinitive proxy

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. )

CONSTELLATION ENERGY CORPORATION

(Name of Registrant as Specified In Its Charter)

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

Letter From the Board of Directors to Shareholders

Letter From the Board of Directors to Shareholders

March 14, 2023

Dear Fellow Shareholders:

We are pleased to invite you to the first Annual Meeting of Shareholders of Constellation Energy Corporation, to be held on Tuesday, April 25, 2023, at 9:00 a.m. Eastern Time using a virtual-only format via audio webcast at www.virtualshareholdermeeting.com/CEG2023.

We have had a successful first year as a publicly traded company since our separation from Exelon Corporation last February, and we are meeting the commitments we made to you when we launched. Guided by our mission to fight the climate crisis, Constellation had strong performance in 2022, including best-in-class nuclear operations and an industry-leading customer business. Our nuclear fleet operated 94.8 percent of the time and our retail energy business was ranked first by customers.

We reported solid financial and operational results, and our long-term outlook has strengthened significantly with passage of the landmark Inflation Reduction Act, which recognizes the essential role of nuclear energy in achieving the nation’s climate goals, changes the risk profile of the company and ensures the future of these assets to help achieve America’s clean energy transition. Constellation supported our communities by providing family-sustaining jobs, including the hiring of approximately 2,000 new people across our business; contributing, along with our employees, $12.5 million to charitable organizations; and volunteering 80,000 hours in the communities we serve. With the Board’s oversight, Constellation created real value for our shareholders, customers, employees and communities.

Accelerating the Transition to a Carbon-Free Future

We launched the new Constellation with a mission to lead the fight against the climate crisis. As the nation’s largest producer of clean, carbon-free energy and a leading supplier of energy products and services to customers, Constellation is uniquely positioned to drive America’s clean energy transition. We operate the nation’s largest nuclear fleet, which along with our renewable facilities, has the generating capacity to power the equivalent of more than 15 million homes, producing approximately 11% of the nation’s carbon-free energy. The reliability and resiliency of nuclear energy’s value to the grid was proven yet again this year during Winter Storm Elliott, when our operated fleet ran at full capacity, preventing rolling blackouts for the 65 million people served by our nation’s largest energy grid.

We are helping our customers reach their sustainability goals, and we have set our own ambitious goal of achieving 95 percent carbon-free energy by 2030 and 100 percent by 2040. In addition, we are investing in new technologies at our clean energy centers to help decarbonize other industries using clean hydrogen and providing customers with innovative sustainability solutions, including hourly carbon-free energy matching.

Commitment to Strong Governance and Compensation Practices

The Board is actively engaged with management on Constellation’s most important issues and in ensuring effective corporate governance. This engagement includes ongoing review and assessment of performance versus financial targets and corporate strategy, including focused time for detailed consideration and debate on both near-term strategic decisions and long-term goal setting, as well as cybersecurity oversight, climate and sustainability matters, and other significant opportunities and risks.

Last summer, the Board assessed Constellation’s governance policies and procedures and ultimately amended committee charters to strengthen oversight responsibilities for sustainability, human capital management and certain risks, and revised our bylaws to adopt proxy access provisions in line with prevailing governance standards. Also, the inaugural year of our shareholder engagement program provided the Board with invaluable feedback, which we consider as we routinely evaluate our governance and compensation practices. Our Board is actively engaged in the company’s commitment to diversity, equity and inclusion (DEI), as well as the implementation of an executive compensation program design that incentivizes our management team to achieve goals aligned with creating long-term shareholder value.

Constellation Energy Corporation 2023 Proxy Statement 1

Letter From the Board of Directors to Shareholders

Diversity, Equity & Inclusion (DEI) Commitment

At Constellation, our commitment to DEI is not only a foundational value — it is an ethical obligation. A business imperative, DEI advances our ability to achieve our vision by attracting, retaining and advancing employees who will best understand and serve our customers, partners, and communities, and providing an inclusive workplace.

Constellation’s DEI commitment means eliminating barriers and creating opportunities that ensure everyone has an equal opportunity to succeed. This year, we launched a $1 million Powering Change program aimed at improving job awareness and training, providing advancement and upskilling opportunities, and breaking down employment barriers for individuals from underrepresented communities. We also signed an historic pledge with the North American Building Trades Union to increase diversity in jobs that are critical in the nation’s transition to a clean energy future.

Thank You

As we reflect on our 2022 accomplishments, we would like to recognize the contributions and impact of our former Board colleague, Rhonda Ferguson, who sadly passed away early last year. We continue to miss Rhonda’s intelligence, professional expertise and dynamic personality, and send our warmest thoughts to her beloved family and dear friends.

Your vote is very important to us. We encourage you to carefully read the attached proxy statement, and we ask that you support our voting recommendations.

Thank you for your continued support of Constellation and the Board as stewards of your investment.

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Notice of Annual Meeting of Shareholders

To Shareholders of Constellation:

 

You are invited to participate in the 2023 Annual Meeting of Shareholders of Constellation. The Annual Meeting will take place in a virtual-only format. Shareholders may begin logging into the meeting on Tuesday, April 25, 2023 at 8:45 a.m. Eastern Time.

 

Items Of Business:
1.  To elect three Class I directors      nominated by our Board of Directors;   2.  To consider and act on an advisory vote regarding the approval of compensation paid to our named executive officers;   3.  To consider and act on an advisory vote regarding the frequency of the approval of compensation paid to our named executive officers;	4.  To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2023; and   5.  To transact any other business properly brought before the meeting and any adjournment or postponement thereof.

Your vote is important, and you are encouraged to vote promptly whether or not you plan to virtually attend the 2023 Annual Meeting of Shareholders.

 

This proxy statement is provided in connection with a solicitation of proxies by the Board of Directors of Constellation Energy Corporation (the “Board”) to be used at the Annual Meeting of Shareholders to be held on Tuesday, April 25, 2023 at 9:00 a.m., Eastern Time, and at any adjournment or postponement thereof (the “Annual Meeting”). This proxy statement is first being provided to our shareholders on or about March 14, 2023.

Voting
Online	By Phone	By Mail
Vote online at www.proxyvote.com 24 hours a day. Prior to the Annual Meeting, visit www.proxyvote.com and use the control number that appears on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials when you access the webpage. You may also scan your QR Barcode above Use the Internet to transmit your voting instructions.	Call toll-free 1-800-690-6903 If your shares are held in the name of a broker, bank or other nominees, follow the telephone voting instructions provided on your voting instruction card. If your shares are registered in your name, call 1-800-690-6903 and follow the telephone voting instructions. You will need the 16-digit control number that appears on your proxy card, voting instruction form or notice of Internet Availability of Proxy Materials.	If you have received a printed version of these proxy materials, complete, date, sign and mail your proxy card in the enclosed postage-paid envelope provided, or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

	BY ORDER OF THE BOARD OF DIRECTORS
	Arden T. Phillips
	Corporate Secretary
	March 14, 2023

Constellation Energy Corporation 2023 Proxy Statement 3

Information About the Annual Meeting

Throughout this proxy statement, “Constellation,” the “Company”, “we,” “our,” or “us” are intended to refer to Constellation Energy Corporation and its consolidated subsidiaries, unless specifically indicated otherwise. Constellation does not incorporate into this document the contents of any website or the documents referred to in this proxy statement.

Distribution of Proxy Materials: This proxy statement is provided in connection with a solicitation of proxies by the Board of Directors of Constellation to be used at the Annual Meeting of Shareholders to be held on Tuesday, April 25, 2023 at 9:00 a.m., Eastern Time, and at any adjournment or postponement thereof. On or about March 14, 2023, this proxy statement, along with our annual report, are being mailed or made available to shareholders.

Attendance at the Annual Meeting: You are invited to attend the virtual Annual Meeting and we request that you vote on the proposals described in this proxy statement as recommended by the Board of Directors. If you have received a printed copy of these materials by mail, you may complete, sign and return your proxy card, or submit your proxy vote by telephone or over the Internet. If you did not receive a printed copy of these materials by mail and are accessing them via the Internet, you may follow the instructions under the heading, “Questions and Answers About the Annual Meeting” beginning on page 94 of this proxy statement to submit your proxy vote via the Internet or by telephone. Also, other information about voting is provided under “Questions and Answers About the Annual Meeting.”

Every Vote is Important: Make your vote count. Please vote your shares promptly to ensure your representation and the presence of a quorum during the Annual Meeting. Vote your shares now via the Internet, by telephone, or by signing, dating, and returning the proxy card or voting instruction form. If you only received a Notice of Internet Availability of Proxy Materials, you may request a paper proxy card to submit your vote by mail, if you prefer. Please act as soon as possible to vote your shares, even if you plan to participate in the Annual Meeting online. If you are a beneficial owner of shares, your broker will not be able to vote your shares with respect to the election of directors and most of the other matters presented during the meeting, unless you have given your broker specific instructions to do so. We strongly encourage you to vote and greatly appreciate your prompt response.

Submitting your proxy now will not prevent you from voting your shares during the Annual Meeting, as your proxy is revocable at your option.

Asking Questions: The virtual meeting platform will provide shareholders with all the comparable rights as an in-person meeting.

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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, and you should read the entire proxy statement carefully before voting.

 

Our Annual Meeting is taking place in a virtual-only format, which provides our shareholders with comparable opportunities to vote and ask questions that they would have at an in-person meeting. For more information, please see, “Questions and Answers About the Annual Meeting” beginning on page 94 of this proxy statement.

 

What Shareholders will be Voting On

 

	Items of Business	Board’s Voting Recommendation		Page
1	To elect three Class I directors nominated by our Board of Directors		FOR ALL	26
2	To consider and act on an advisory vote regarding the approval of compensation paid to named executive officers		FOR	53
3	To consider and act on an advisory vote regarding the frequency of the approval of compensation paid to named executive officers		1-YEAR	54
4	To ratify the appointment of PricewaterhouseCoopers LLP as Constellation’s independent registered public accounting firm for 2023		FOR	89
5	To transact any other business properly brought before the meeting and any adjournment or postponement thereof.

 

We are not aware of any other business to come before the Annual Meeting.

 

How to Vote in Advance of the Meeting

If you are a shareholder on the record date, you may vote in advance of the meeting in any of the following ways:

 

 

Constellation Energy Corporation 2023 Proxy Statement 5

Proxy Summary

Constellation’s Business Strategy

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Proxy Summary

2022 Operational Highlights and Accomplishments

Constellation Energy Corporation 2023 Proxy Statement 7

Proxy Summary

Overview of Our Board and Director Nominees

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Proxy Summary

Compensation Program Structure

Constellation Energy Corporation 2023 Proxy Statement 9

Proxy Summary

Key Executive Compensation Practices

Key Executive Compensation Practices

 

Our executive compensation policies and programs are built upon a strong foundation of corporate governance and compensation best practices. Below is a high-level overview of certain elements of our executive compensation program.

What We Do:		What We Don’t Do:
•  Align pay for performance •  Maintain significant stock ownership requirements for Directors and Executive Officers •  Cap incentive awards and conduct an annual risk assessment of the compensation programs •  Subject change-in-control benefits to double trigger vesting •  Retain an independent compensation consultant that advises the Compensation Committee •  Provide limited perquisites based on sound business rationale •  Subject incentive compensation awards to clawback provisions •  Review of pay equity by an independent third party •  Engage in year-round shareholder outreach •  Prohibit hedging, short sales, derivative transactions or pledging of Company stock •  Assess our programs against peer companies and best practices •  Set appropriate levels of “stretch” in incentive targets		•  No guaranteed minimum payout of AIP or LTIP programs •  No employment agreements •  No excise tax gross-ups for change-in-control agreements •  The value of LTIP awards is not included in pension or severance calculations •  No option repricing or buyouts without stockholder approval

 

ESG Principles

 

We are committed to a carbon-free future while maintaining a strong balance sheet, advancing our environmental, social and governance (ESG) initiatives and investing in carbon-free energy solutions. Our ESG principles are core to our purpose and business strategy of supporting the transition to a carbon-free future. Our principles consist of these critical focus areas:

 

 

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Proxy Summary

Sustainability

Constellation Energy Corporation 2023 Proxy Statement 11

Proxy Summary

Sustainability

Our Renewable Fleet

 

•

Constellation operates a robust fleet of renewables consisting of hydroelectric, wind and solar power which have a combined capacity of more than 2.6 GW.

•

We own and operate one of the nation’s largest solar power facilities in California that has a total generation capacity of 242 MW.

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We also operate and have ownership interests in 27 wind projects across 10 states that have generating capacity of about 1,738 MW of electricity.

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Our hydroelectric assets consist of two plants in Maryland and Pennsylvania.

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The Conowingo Hydroelectric Generating Station can generate up to 572 MW of electricity, enough to power 165,000 homes, and can respond to changes in demand within 10 minutes.

•

Muddy Run Pumped Storage Facility can generate up to 1,070 MW of electricity by pumping water into the upper reservoir at night, when demand decreases, to power turbines during subsequent peak-demand periods.

 

Innovation and Technology Enablement

 

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Our culture embraces innovation to achieve a clean energy future.

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We focus on three key trends or categories of technological transformation: Decarbonization, Digitalization and Diversification.

 

Clean Energy Centers

 

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Our nuclear generation facilities are carbon-free energy centers which we will leverage by exploring co-location of customer load, direct air capture of carbon dioxide, and producing clean hydrogen and other sustainable fuels to reduce industrial emissions.

 

Policy Engagement and Advocacy

 

•

We actively support energy policies that address the need for carbon-free energy generation in the U.S.

•

We are engaged in advocacy in connection with federal and state agency rulemaking and in the courts.

 

Energy Equity and Environmental Justice

 

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Working within our communities, we will make environmental justice and energy equity a central focus of our actions and work to build a more equitable future for our employees, customers, business partners and community members.

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Reducing the energy burden of communities is an important tenet of our focus on energy equity and environmental justice.

•

In 2022, we established Environmental Justice Principles to guide our efforts. For more on our approach to energy equity, please see our Environmental Justice Policy on our website at https://www.constellationenergy.com/sustainability/environment/esg-resources.htm.

 

 

 

 

12  Constellation Energy Corporation 2023 Proxy Statement

Proxy Summary

Diversity, Equity and Inclusion (DEI)

Constellation Energy Corporation 2023 Proxy Statement 13

Proxy Summary

Corporate Governance

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Proxy Summary

Shareholder Engagement

Shareholder Engagement

In 2022, Constellation contacted holders of nearly 80% of our outstanding shares with offers to engage. Portfolio managers and governance professionals who accepted invitations to engage included a significant cross-section of our shareholder base, representing approximately 34% of Constellation’s outstanding shares. We believe that engaging with our investors provides valuable insights for the Board and its committees into investor perspectives and priorities. During 2022, our engagement team, comprising members of the Office of Corporate Governance, Investor Relations, Sustainability, Executive Compensation, and Human Resources departments, met to discuss a wide variety of issues with investors. Topics covered in our engagement meetings included: business operations and strategy, sustainability and climate matters, executive compensation, human capital and board composition and effectiveness. The feedback received from shareholders and other stakeholder groups was shared with each Board committee and the Board, as appropriate.

We believe that our approach to engaging openly with our investors on topics such as environmental strategy, corporate governance, executive compensation and other issues drives increased accountability, improves decision making, and ultimately creates long-term value. We plan to generally incorporate the following elements into our shareholder engagement process going forward.

Responsiveness to Investor Feedback in 2022

Feedback from shareholders indicated that there were no desired changes to our environmental, social and governance policies and practices at this time. During our outreach in the fall and winter of 2022, we committed to conduct future engagement to continue to learn more about the priorities and issues that matter most to our shareholders.

Constellation Energy Corporation 2023 Proxy Statement 15

Table of Contents

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Cautionary Statements Regarding Forward-Looking Information

Cautionary Statements Regarding Forward-Looking Information

This proxy statement contains information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “forecast,” “aim,” “should,” “will,” “may” and similar expressions or by using future dates in connection with any discussion of, among other things, the construction or operation of new or existing facilities, operating performance, trends, events or developments that we expect or anticipate will occur in the future, statements relating to volume changes, share of sales and earnings per share changes, anticipated cost savings, potential capital and operational cash improvements, changes in global supply and demand conditions and prices for our products, statements regarding our future strategies, products and innovations, statements regarding our greenhouse gas emissions intensity reduction goals, and statements expressing general views about future operating results. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements are not historical facts, but instead represent only our beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of our control. It is possible that our actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Risks and uncertainties include, but are not limited to the risks and uncertainties described in (a) Part I, ITEM 1A. Risk Factors, and (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022, and those described from time to time in our future reports filed with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this proxy statement. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. We do not undertake any obligation to publicly release any revision to these forward-looking statements to reflect events or circumstances after the date of this proxy statement.

Throughout this proxy statement, we refer to certain non-GAAP measures, including EBITDA, adjusted EBITDA and free cash flow. See the reconciliation to the corresponding GAAP measure set forth in Appendix A of this proxy statement.

References throughout the proxy statement to “GHG emissions” refer to Scope 1 and Scope 2 emissions.

Constellation Energy Corporation 2023 Proxy Statement 17

About Us

About Us

Headquartered in Baltimore, Maryland, Constellation is the nation’s largest producer of carbon-free energy and a leading competitive retail supplier of power and energy products and services for homes and businesses across the United States. Our carbon-free generation fleet produces enough energy to power the equivalent of approximately 15 million homes. We are helping to accelerate the nation’s transition to clean energy with more than 32,355 megawatts of generating capacity consisting of nuclear, wind, solar, natural gas and hydro assets and annual output that is approximately 90% carbon-free.

Already the lowest carbon emitter of any major investor-owned U.S. generator, we have set a goal to eliminate 100% of our Scope 1 and Scope 2 greenhouse gas (GHG) emissions by leveraging innovative technology and enhancing our diverse mix of hydro, wind and solar resources, paired with the nation’s largest carbon-free nuclear fleet. We produce approximately 11% of the nation’s carbon-free energy, making us an indispensable partner to businesses and state and local governments that are setting ambitious carbon- reduction goals and seeking long-term solutions to the climate crisis. Other important details about Constellation include:

Constellation’s Value Proposition

Our value proposition is illustrated below.

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About Us

Separation from Exelon

Separation from Exelon

On February 1, 2022, Constellation separated from Exelon as an independent publicly traded company. The separation resulted in the establishment of Exelon as the nation’s largest fully regulated transmission and distribution utility company and Constellation as the largest producer of carbon-free power paired with a leading customer-facing platform, that includes carbon- free, sustainable energy solutions.

The separation was designed to unlock strategic flexibility for each company to focus on its core business strategies to better meet evolving customer needs and stakeholder goals. The separation gave each company the financial and strategic independence to focus on its specific customer needs, while executing its core business strategy with the resources necessary to best serve customers and sustain long-term investment and operating excellence. As a result of the separation. Constellation also gained the agility to adapt to a rapidly changing energy landscape.

Constellation Business Strategy

We are dedicated to accelerating the nation’s transition to a clean energy future and aim to serve as a strategic partner to businesses and federal, state and local governments that are setting ambitious carbon-reduction goals and seeking long-term solutions to the climate crisis. We will be a leading advocate at the federal and local levels for policies that will reduce GHG emissions and preserve and grow clean energy.

The principles of our sustainable business strategy demonstrate our commitment to a carbon-free future while maintaining a strong balance sheet, advancing our ESG initiatives and investing in carbon-free energy solutions. Our strategy builds on four principles:

Power America’s Clean Energy Future. We will operate and grow the nation’s largest fleet of carbon-free, zero-emissions generation facilities, with world-class levels of safety, reliability and resiliency.

Expand America’s Largest Fleet of Clean Energy Centers. We will leverage and expand our state-of-the-art carbon-free energy assets by exploring co-location of customer load, direct air capture of CO2, and producing clean hydrogen and other sustainable fuels to reduce industrial emissions.

Provide Energy and Sustainability Solutions for Customers. We will provide reliable, resilient energy and deliver innovative sustainability solutions that help customers achieve their clean energy goals.

Uplift and Strengthen our Communities. We will advance respect, belonging, diversity and equity by driving community investment and creating family-sustaining clean energy jobs.

We are committed to reducing our GHG emissions as follows:

Constellation Energy Corporation 2023 Proxy Statement 19

About Us

Constellation Business Strategy

At the core of our strategy is a belief that our nuclear plants can do more than just provide carbon-free energy to the grid 24 hours a day, 7 days a week, 365 days a year. We envision them operating as clean energy centers that enable new and emerging technologies and products to decarbonize parts of the U.S. economy that, up until now, have defied easy solutions and allow us to make beneficial use of excess carbon-free energy on the grid.

We are currently pursuing multiple technologies and products that align with our business strategy and would contribute to a carbon-free transition including: carbon-free hydrogen, direct air capture and hourly carbon-free energy matching.

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About Us

Constellation Business Strategy

Carbon-Free Hydrogen

While Constellation is already the nation’s largest producer of carbon-free electricity, we are also leveraging our carbon-free fleet to help decarbonize other hard to decarbonize industries. Working with the U.S. Department of Energy (DOE), Constellation is pioneering research at our Nine Mile Point Nuclear Station in upstate New York to demonstrate that hydrogen can be produced with carbon-free nuclear energy.

Sustainable fuels and other products produced with hydrogen hold the key to decarbonizing industries and processes that defy easy climate solutions, such as long-haul shipping, agriculture, steelmaking and aviation, as well as clean fertilizers that will grow sustainable foods. We are seeking to expand hydrogen production to other plants in our fleet and are exploring ways to reduce emissions at our fossil plants by blending clean hydrogen with natural gas.

Direct Air Capture

While we work toward zero-emissions, we are exploring ways to go even further. Through a separate DOE grant, we are exploring the potential for direct air capture (DAC) technology at our Byron nuclear plant in northern Illinois. While nuclear plants produce no carbon emissions, DAC technology captures carbon dioxide (CO₂) directly from the atmosphere, a possible next-generation technology to combat the climate crisis. In this way, nuclear plants have the potential not only to be carbon-free, but carbon negative.

Hourly Carbon-Free Energy Matching

Matching energy demand with power generation and delivery in real time is fundamental to the design and engineering of the modern grid going back 100 years. In turn, a true clean energy grid will require enough carbon-free energy to meet demand for every hour of every day. With our nuclear fleet, Constellation is uniquely positioned to provide carbon-free energy to consumers whenever they need it, for whatever needs to be powered, wherever they are in the region. We are working towards developing an hourly carbon-free energy matching technology that will help customers across the country achieve true-zero emissions, as opposed to the current practice of annualizing renewable energy certificates. We anticipate that our hourly solution will be the most advanced, real-time carbon accounting solution of its kind, going beyond other net zero programs that aggregate carbon-free energy megawatts over time, and giving customers clearer and more accurate data on their emissions impact.

Empowering Our Communities

These and other emerging technologies hold the key to solving the climate crisis and transforming our economy. As we continue to invest in the future of our industry, we also recognize our responsibility to invest in our communities and the workforce of tomorrow. In 2022, Constellation provided $12.5 million to charitable causes, including $4.6 million from our employees. In addition to their dollars, our employees donated approximately 80,000 hours of volunteer time.

Constellation Energy Corporation 2023 Proxy Statement 21

About Us

ESG Overview

ESG Overview

Our environmental, social and governance (ESG) principles are core to our purpose and business strategy of supporting the transition to a carbon-free future, and we believe these attributes make us a premier ESG company in the power sector.

Our principles consist of these critical focus areas:

Board Oversight of ESG

Our Board oversees the company’s ESG and sustainability efforts. In particular, our Board monitors our sustainability practices through oversight by the Corporate Governance Committee, which reviews our environmental strategies, including climate and sustainability policies. We also have designated leadership and team members to help advance our ESG principles, including the formation of the Constellation Sustainability Council, comprised of executives across the company. The Sustainability Council reviews sustainability policies and activities, ensures alignment with our purpose statement, reviews emerging ESG trends and makes recommendations to management on sustainability policies.

Sustainability

Our sustainability values drive our people to function as a team and work towards our common purpose: accelerating the transition to a carbon-free future for the benefit of our customers, communities and shareholders. This purpose drives us to maintain our position as an industry leader in the production of 24/7 reliable and affordable carbon-free energy and encourages us to innovate and expand upon the carbon-free energy solutions we currently provide to businesses and communities across the United States.

Climate Change Commitments

We see the management of climate-related risks and opportunities as fundamentally intertwined with our business strategy and community engagement.

Carbon-free, Safe and Reliable Energy

Many sectors of the economy are pivoting to electricity as the power source to reach their decarbonization goals, with electricity demand projected to double by 2050. We are well equipped to meet the need for clean, reliable and affordable energy in the U.S., where we produce nearly as much carbon-free energy as our next two largest competitors combined. In 2020, our total emissions were lower than any major publicly traded U.S. power generator and our carbon intensity is more than four times less than our closest competitor.

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About Us

Sustainability

Constellation Energy Corporation 2023 Proxy Statement 23

About Us

Diversity, Equity & Inclusion

Diversity, Equity & Inclusion (DEI)

Constellation operates in a world rich in diversity — in race, ethnicity, gender identification, sexual orientation, abilities, experiences, and thought. We know that engaging and supporting a diverse workforce at all levels of the organization is key to fostering innovation, growing an inclusive and engaged culture, and delivering strong performance.

Our employees are our greatest asset and form the foundation of our success – we cultivate a workplace culture where all individuals can grow and develop to contribute to their full potential. We are committed to recruiting, developing and supporting an innovative, diverse team of employees that reflects the communities we serve.

Board Oversight of DEI

The Board of Directors is focused on building and maintaining a corporate culture that values and prioritizes diversity, equity, and inclusion, including with respect to Board composition. Diversity is, and has been, an important consideration in evaluating candidates for our Board. The Board also receives regular updates from senior management regarding the progress the company has made in achieving its overall DEI goals and objectives.

Key Elements of Our DEI Mission

Our DEI Strategic Priorities

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About Us

DEI Highlights

DEI Highlights

Constellation Energy Corporation 2023 Proxy Statement 25

Proposal 1:

Election of Directors

We currently have a classified board structure that is being phased out over a three-year period beginning at the 2023 Annual Meeting of Shareholders. The Corporate Governance Committee has recommended, and the Board has nominated, our current Class I directors, Joseph Dominguez, Julie Holzrichter and Ashish Khandpur for re-election by shareholders as Class I directors. The initial term of the Class I directors will expire at the 2023 Annual Meeting of Shareholders. Upon re-election, each such director will serve a three-year term through 2026 or until his or her successor is elected and qualified, or his or her earlier death, resignation or removal. All of the nominees are presently members of the Board, and the Board is recommending that all three nominees be elected.

Nneka Rimmer, Bradley Halverson and Charles Harrington are Class II directors whose terms will expire at the 2024 Annual Meeting. At the 2024 Annual Meeting, the Class II directors will then be nominated to stand for re-election for a two-year term through 2026. Laurie Brlas, Yves de Balmann, Robert Lawless and John Richardson are Class III directors whose terms will expire at the 2025 Annual Meeting. At the 2025 Annual Meeting of Shareholders, the Class III directors will be nominated to stand for re-election for a one-year term through 2026. Commencing in 2026, all of our directors will stand for election each year for annual terms and following the 2026 Annual Meeting of Shareholders, our Board will no longer be divided into three classes.

Each director shall be elected by a plurality of the votes cast; however, under our bylaws, for any incumbent director to become a nominee for election by the shareholders as a director, that director must tender an irrevocable offer to resign from the Board contingent upon acceptance of such offer of resignation by the Board if the director receives a plurality of the votes cast but fails to receive a majority of the votes cast in an election that is not a contested election. If an incumbent director receives a plurality of the votes cast, but does not receive a majority of the votes cast in an election that is not a contested election, the Corporate Governance Committee, or such other independent committee designated by the Board, must make a recommendation to the Board as to whether to accept or reject the offer of resignation of the incumbent director, or whether other action should be taken. The independent members of the Board will consider the Corporate Governance Committee's recommendation and publicly disclose the Board's decision and the basis for that decision within 90 days from the date of the certification of the final election results. The director not receiving a majority of the votes cast will not participate in the Corporate Governance Committee's recommendation or the Board's decision regarding the offer to resign. For this purpose, the term "a majority of the votes cast" means that the number of votes cast "for" a director's election exceeds the number of votes cast "against" the director's election. Further, a "contested election" is one in which the Corporate Secretary receives a notice that a shareholder has nominated or intends to nominate a person for election to the Board in compliance with our bylaws and such nomination has not been subsequently withdrawn or on prior to the tenth day before the notice of meeting is first mailed.

A brief statement about the background and qualifications of each nominee and each continuing director is provided on the following pages. No director has a familial relationship to any other director, nominee for director or executive officer.

Each nominee has informed the Board that he or she is willing to serve as a director. If any nominee for whom you have voted becomes unable to serve, your proxy may be voted for another person designated by the Board. It is the intention of the proxyholders to vote proxies for the election of the nominees named in this proxy statement, unless such authority is withheld.

26  Constellation Energy Corporation 2023 Proxy Statement

Proposal 1: Election of Directors

Our Director Nominees

Our Director Nominees

Biographies of Class I Directors with Terms Expiring at the 2023 Annual Meeting

A brief biography regarding the background and qualifications of each director nominee is provided on the following pages. Each nominee’s biographical information includes a description of the director’s experience, qualifications, attributes and skills that qualify him or her to serve on the Board of Directors.

Constellation Energy Corporation 2023 Proxy Statement 27

Proposal 1: Election of Directors

Our Director Nominees

28  Constellation Energy Corporation 2023 Proxy Statement

Proposal 1: Election of Directors

Current Class II Directors

Biographies of Continuing Class II Directors with Terms Expiring at the 2024 Annual Meeting

The Board is classified until the 2026 Annual Meeting and, therefore, the following individuals who are Class II directors will not stand for re-election at the 2023 Annual Meeting of Shareholders.

Constellation Energy Corporation 2023 Proxy Statement 29

Proposal 1: Election of Directors

Current Class II Directors

30  Constellation Energy Corporation 2023 Proxy Statement

Proposal 1: Election of Directors

Current Class III Directors

Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting

As explained above, the Board is classified until the 2026 Annual Meeting and, therefore, the following individuals who are Class III directors will not stand for re-election at the 2023 Annual Meeting of Shareholders.

Constellation Energy Corporation 2023 Proxy Statement 31

Proposal 1: Election of Directors

Current Class III Directors

32  Constellation Energy Corporation 2023 Proxy Statement

Corporate Governance

Constellation and the Board are committed to maintaining the highest standards of corporate governance, which we believe are essential for sustained success and creating long-term shareholder value. We believe our strong corporate governance practices will help us achieve our performance goals and maintain the trust and confidence of our shareholders, employees, customers, regulators, and other stakeholders.

Director Qualification and Nomination Criteria

Effective oversight of Constellation’s strategic direction requires our Board of Directors to be composed of diverse individuals who possess attributes and core competencies important to the company. The Corporate Governance Committee identifies and recommends director nominees for election to the Board and periodically retains a search firm to assist with the identification of potential candidates. The Corporate Governance Committee may also consider nominees suggested by other sources, including incumbent Board members and shareholders.

The Corporate Governance Committee and the Board determine the appropriate mix of skills and characteristics required to meet the needs of the Board as a whole and evaluates the qualifications of each director candidate in accordance with the criteria described in the director qualification standards section of our Corporate Governance Principles. Though the Board does not have a formal policy regarding the consideration of diversity in identifying nominees for director, directors should be selected so that the Board represents diverse experience at various policy making and executive levels in business, government, education and in industries that are relevant to the company’s business operations. The Board considers the term “diversity” to include differences of viewpoint, professional experience, veteran status, education, age, nationality, skill and other individual qualities and attributes that contribute to board heterogeneity as well as differences in race and gender.

The director selection criteria described above are evaluated by the Corporate Governance Committee each time a new candidate is considered for Board membership. The Corporate Governance Committee and the Board may consider such other factors it deems to be relevant to the success of a publicly traded company operating in the energy sector. As part of the annual nomination process, the Corporate Governance Committee reviews the qualifications of each director nominee, including currently serving Board members, and reports its findings to the Board. On February 6, 2023, the Corporate Governance Committee determined that each Board member satisfied the criteria described above and advised the Board that each of the director nominees listed under “Proposal 1: Election of Directors” is qualified to serve on the Board.

Constellation Energy Corporation 2023 Proxy Statement 33

Corporate Governance

Board Skills

Board Skills

The Corporate Governance Committee conducts regular reviews of a skills matrix to ensure that the Board continues to be comprised of members with the appropriate set of skills, qualifications and experiences. Our skills matrix includes the following skills and attributes:

34  Constellation Energy Corporation 2023 Proxy Statement

Corporate Governance

Board Skills Matrix

Board Skills Matrix

The following matrix identifies the five most prominent skills and attributes that each director brings to their service to Constellation’s Board and committees. While each independent director possesses numerous skills and attributes, we believe identifying the five most prominent skills and attributes provides a much more meaningful presentation of the key contributions and value of each director. Based on his role as President and Chief Executive Officer, we believe Mr. Dominguez possesses all the skills listed below.

Constellation Energy Corporation 2023 Proxy Statement 35

Corporate Governance

Board Diversity

Board Diversity

The matrix below summarizes certain self-identified gender identity and demographic diversity attributes of our Board as required by Nasdaq. Each of the categories and the information listed in the table below has the meaning set forth in Nasdaq Listing Rule 5605(f) and is being presented in compliance with Nasdaq’s disclosure format. Each director was asked to self- identify their race/ethnicity, gender identity, disability, military experience, and/or LGBTQ+ identity.

Board Diversity Matrix as of March 14, 2023

We believe that the composition of our Board complies with the standards for diverse board composition under Nasdaq Listing Rule 5605(f). Under the Nasdaq board diversity rule, we are required to have, or explain why we do not have, at least two members of our Board who are diverse, including at least one diverse director who self-identifies as female and at least one director who self-identifies as an underrepresented minority or LGBTQ+. Nasdaq defines “diverse” to mean female, under- represented minority, or LGBTQ+, and defines “under-represented minority” to mean an individual who self-identifies as one or more of the following: Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, or two or more races or ethnicities.

36  Constellation Energy Corporation 2023 Proxy Statement

Corporate Governance

Board Leadership Structure

Board Leadership Structure

Constellation’s bylaws permit the independent members of the Board to determine the leadership structure of the Board, including whether the roles of Board Chair and Chief Executive Officer should be performed by the same individual or whether the roles should be performed by separate individuals. As a matter of policy, the Board believes that separation of these functions is not required, and whether to combine the roles or not is a matter for the Board’s sole discretion, taking into consideration the current and anticipated circumstances of the company, the skills and experiences of the individual or individuals in question, and the leadership composition of the Board. The Board believes that it is important to retain the flexibility to make this determination at any given point in time based on what it believes will provide the best leadership structure for the company, taking into account the needs of the company at that time. Currently, the roles of the Chief Executive Officer and Board Chair are separated. The Board believes that this leadership structure ensures independent oversight and promotes the Board’s ability to effectively represent the best interests of all shareholders.

The Board is committed to continued independent oversight at all times, and our Corporate Governance Principles provide that the independent members of the Board shall select and elect a Lead Independent Director in the event the Board Chair and Chief Executive Officer roles are held by the same individual, or the person holding the role of Board Chair is not independent under the company’s independence standards for directors. At any time during which the position of Lead Independent Director may be required, but is vacant due to timing considerations, the Chair of the Corporate Governance Committee shall serve as the Lead Independent Director.

The duties of the Lead Independent Director include:

Board Responsibilities

Constellation’s operations are managed by executive officers under the direction of the Board of Directors. The Board considers the interests of all of its constituencies, including: shareholders, customers, employees, and the communities we serve. The Board is committed to ensuring that Constellation conducts business in accordance with the highest standards of ethics, integrity, and transparency.

The Board’s responsibilities include, but are not limited to, the oversight of:

The Board also reviews and approves major financial objectives and strategic and operating plans.

Constellation Energy Corporation 2023 Proxy Statement 37

Corporate Governance

Board Committees

The Board discharges its responsibilities through regularly scheduled meetings as well as through telephonic meetings, actions by written consent and other communications with management, as appropriate. The non-employee directors hold regularly scheduled executive sessions without management. The directors spend considerable time preparing for Board and committee meetings. Directors are expected to attend all meetings of the Board and the committees upon which they serve, and all Annual Meetings of shareholders. During the fiscal year ended December 31, 2022, the Board held five meetings and each of the directors attended more than 75% of the meetings of the Board and the committees on which he or she served. Attendance at Board and committee meetings during 2022 averaged 100%. The 2023 Annual Meeting of Shareholders will be our first Annual Meeting since we became a publicly traded company in February 2022.

Board Committees

Constellation has four standing Board committees: Audit & Risk; Compensation; Corporate Governance and Nuclear Oversight. Each committee is comprised exclusively of independent directors.

Each committee is governed by a Board-approved charter stating its responsibilities. The charters are available on the company’s website at www.Constellationenergy.com on the Board committees page and in print to any shareholder who requests a copy from Constellation’s Corporate Secretary. The committee charters are regularly reviewed and updated to incorporate best practices and prevailing governance trends.

Each committee charter gives the committee authority and discretion to retain and terminate the services of one or more outside advisors and consultants to assist it in performing its duties. The committee has the sole authority to approve such advisors’ and consultants’ fees and other retention terms, and the company funds the cost of the committee’s advisors and consultants.

Committee Membership as of March 1, 2023

Director	Audit and Risk	Compensation	Corporate Governance	Nuclear Oversight
de Balmann			✔
Brlas
Dominguez(1)	—	—	—	—
Halverson		✔	✔
Harrington	✔			✔
Holzrichter	✔	✔
Khandpur		✔	✔
Lawless			✔
Richardson	✔
Rimmer	✔			✔

 = Chair of Committee

38  Constellation Energy Corporation 2023 Proxy Statement

Corporate Governance

Board Committees

Audit & Risk Committee

The Audit & Risk Committee’s duties and responsibilities include:

The charter requires the Audit & Risk Committee to perform an annual self-evaluation, review its charter each year and meet at least four times each year or more frequently as the committee chair deems appropriate. During the fiscal year ended December 31, 2022, the Audit & Risk Committee held six meetings.

The charter also requires the Audit & Risk Committee to be composed of three or more directors that satisfy the independence requirements for membership on the Audit & Risk Committee.

Our Board has determined that each of the Audit & Risk Committee’s members satisfy the applicable independence and other requirements of Nasdaq and the SEC for audit committees and that Ms. Brlas, Ms. Rimmer and Mr. Harrington each quality as an “audit committee financial expert” as defined under applicable SEC rules.

Compensation Committee

The Compensation Committee’s duties and responsibilities include:

The Compensation Committee charter requires the committee to perform an annual self-evaluation, review its charter each year and meet at least four times each year. During the fiscal year ended December 31, 2022, the Compensation Committee held four meetings. The charter also requires the Compensation Committee to be composed of three or more independent non-employee directors.

The Compensation Committee has retained Meridian Compensation Partners, LLC (Meridian) as its consultant to assist it in evaluating executive compensation. Meridian reports directly to the Compensation Committee and the committee retains sole authority to hire the consultant, approve its compensation, determine the nature and scope of its services, evaluate its performance, and terminate its engagement. A representative of Meridian attended all meetings of the Compensation Committee in 2022.

Constellation Energy Corporation 2023 Proxy Statement 39

Corporate Governance

Corporate Governance Committee

Meridian provides various executive compensation services to the Compensation Committee, which generally include advising the Compensation Committee on the principal aspects of our executive compensation program and changing industry practices and providing market information and analysis regarding the competitiveness of our program design.

During 2022, Meridian performed several services, including the following:

Meridian provided no services to management during 2022. The Compensation Committee has assessed the independence of Meridian pursuant to Nasdaq listing standards and SEC rules and concluded that no conflict of interest exists that would prevent Meridian from serving as an independent consultant to the Compensation Committee.

Corporate Governance Committee

The Corporate Governance Committee’s duties and responsibilities include:

The Corporate Governance Committee charter requires the committee to perform an annual self-evaluation, review its charter each year and meet at least four times each year. During the fiscal year ended December 31, 2022, the Corporate Governance Committee held four meetings. The charter also requires the Corporate Governance Committee to be composed of three or more independent non-employee directors.

Nuclear Oversight Committee

The Nuclear Oversight Committee’s duties and responsibilities include oversight of management’s administration of:

The charter requires the Nuclear Oversight Committee to perform an annual self-evaluation, review its charter each year and meet at least four times each year. During the fiscal year ended December 31, 2022, the Nuclear Oversight Committee held four meetings. Each meeting of the Nuclear Oversight Committee is held at one of our nuclear facility sites.

40  Constellation Energy Corporation 2023 Proxy Statement

Corporate Governance

Director Independence

Director Independence

The Board has incorporated the Nasdaq and SEC independence standards into the company’s independence standards contained in our Corporate Governance Principles. The Board has affirmatively determined that none of the non-employee directors who served on the Board in 2022 and all nominees for election, other than Mr. Dominguez as Constellation’s President and Chief Executive Officer, has a material relationship with the company and has affirmatively determined that each non-employee director is independent according to these independence standards.

The Board also determined that all members of the Audit & Risk Committee are independent within the definitions of independence of both Nasdaq listing standards and the SEC standards for audit committee members. The Board affirmatively determined that each member of the Audit & Risk Committee: (i) did not accept directly or indirectly any consulting, advisory, or other compensatory fee from the company or any of its subsidiaries; (ii) was not an affiliated person of the company or any of its subsidiaries; and therefore (iii) satisfied the Nasdaq independence standards for audit committee members.

The Board has also determined that all members of the Compensation Committee are independent within the definitions of independence of both Nasdaq listing standards and the SEC standards for compensation committee members. The Board affirmatively determined that each member of the Compensation Committee: (i) has no material relationship to the company which would impair such director’s ability to be independent from management in connection with the duties of a compensation committee member; (ii) was not an affiliated person of the company or any of its subsidiaries; and therefore (iii) satisfied the Nasdaq independence standards for compensation committee members. There were no related person transactions identified for 2022.

Bylaw and Charter Amendments

In July 2022, the Board conducted an assessment of the company’s governance practices compared against the voting policies of proxy advisory firms and various institutional investors, and the governance practices of a select group of peers and other large public companies. The results of the assessment indicated that our governance practices and policies were in line with our peers and generally accepted best practices. However, following the assessment, the Board deemed it to be in the best interests of the company to adopt certain amendments to our charters and bylaws.

Specifically, the Board made amendments to the bylaws to implement “proxy access” to allow a shareholder, or group of up to twenty shareholders, owning at least three percent of the company’s outstanding capital stock continuously for at least three years, to nominate and include in the company’s proxy materials for an annual meeting of shareholders, director nominees constituting up to the greater of two nominees or twenty percent of the Board, provided that the shareholder(s) and the director nominee(s) satisfy the requirements set forth in the bylaws.

Also, the Board revised the charters to the Audit & Risk, Compensation and Corporate Governance committees to clarify and enumerate responsibilities regrading: sustainability (Corporate Governance), human capital management (Compensation) and risk management (Audit & Risk).

Corporate Governance Principles

Our standards of corporate governance are outlined in our Corporate Governance Principles, which in conjunction with our articles of incorporation, bylaws, Board committee charters and related policies and practices, form the framework for the effective governance of the company. The Corporate Governance Principles address matters including the Board’s responsibilities and role; Board structure, director selection, evaluation, and additional matters such as succession planning, executive stock ownership requirements, and our recoupment policy. The Corporate Governance Principles were initially adopted on February 1, 2022 and are reviewed periodically to reflect evolving governance trends and to remain aligned with the needs of the company and its stakeholders.

The full text of the Corporate Governance Principles, bylaws, the charters for each of the Board committees, and the Code of Business Conduct are available on our website, www.constellationenergy.com. These materials are also available in print to any person, without charge, upon written request to:

Corporate Secretary
Constellation Energy Corporation
1310 Point Street

Baltimore, MD 21231-3380

Constellation Energy Corporation 2023 Proxy Statement 41

Corporate Governance

Board Role in Risk Oversight

Board Role in Risk Oversight

The Board has broad responsibility to provide oversight of significant risks primarily through direct engagement with management and through delegation of ongoing risk oversight responsibilities to committees of the Board. Any risk oversight area not allocated to a committee remains with the Board. Each Board committee reports regularly to the Board on discussions of enterprise risks for which it is responsible. Reports provided by senior leadership, as well as third-party experts, support oversight of the key risks delegated to each committee and the full Board.

42  Constellation Energy Corporation 2023 Proxy Statement

Corporate Governance

Enterprise Risk Management

Enterprise Risk Management

Managing business risks of all types, from strategic, operational, financial, and regulatory risks to global risks like climate change, is central to Constellation’s business. Our Enterprise Risk Management (“ERM”) team is responsible for coordinating Constellation’s risk management program. The program incorporates the Three Lines of Defense Model of governance developed by the Institute of Internal Auditors, and is designed to anticipate strategic and emerging risks, integrate risk into business planning, minimize unexpected performance variances, and support growth initiatives within Constellation’s risk appetite.

The ERM team works collaboratively with business teams to help them identify and assess risks, and to better understand how to manage risks and establish tolerances that allow for growth while staying within our risk appetite. It also provides an enterprise- wide view of risks and risk management practices. Regular risk assessments deepen our understanding of risks, enable effective action to mitigate risks and strengthen our risk culture. We align our key risk indicators with our risk appetite and industry-leading practices.

Successful risk management requires participation from internal teams across our businesses and the ERM team tasked with identifying and evaluating the most significant risks of the business and the actions needed to manage and mitigate those risks. Also, the senior executives of the business unit discuss risks with the Audit & Risk Committee.

Constellation assesses and mitigates our environmental risk as part of both the risk program and the ISO 14001:2015 Environmental Management System.

Board Oversight of ESG

The Board is actively engaged on a wide range of environmental, social and governance (ESG) issues at both the committee and full Board levels.

Director Retirement Policy

Each non-employee director must retire from the Board at or before the next Annual Meeting of Shareholders following the director’s 80th birthday. The Board has full discretion to decline a tendered resignation if it determines, based on the recommendation of the Corporate Governance Committee, that it is in the best interests of the company and its shareholders to extend the director’s continued service for an additional period of time. The Board has not established term limits for director service, but relies instead on the mandatory retirement age and annual Board evaluations to assure a regular process of Board refreshment. The Board believes term limits could deprive the Board of the valuable contributions of experienced directors who have extensive knowledge of the company and its operations.

Board and Committee Evaluations

Our Board seeks to operate with the highest degree of effectiveness, supporting a dynamic boardroom culture of independent thought and has initiated a strong evaluation process for the Board and Board committees.

Constellation Energy Corporation 2023 Proxy Statement 43

Corporate Governance

Annual Board Self-Evaluation Process

Annual Board Self-Evaluation Process

The Board conducts an annual self-assessment of its performance and effectiveness. The process is coordinated by the Board Chair and the chair of the Corporate Governance Committee and considers recommendations from the Corporate Governance Committee on the process and criteria to be used for Board and committee evaluations. The Corporate Governance Committee oversees and approves the annual formal board evaluation process.

Annual Committee Self-Evaluation Process

All of the Board’s standing committees conduct annual self-assessments of their performance and take into consideration the following:

Future Self-Evaluation Process Considerations

Based on the relatively short period of operation as a Board since the company’s separation from Exelon in February 2022, the Board deemed it appropriate to evaluate its effectiveness using written evaluations. Going forward, the Board will consider the best method of determining and evaluating its effectiveness (e.g., incorporating one-one-one interviews conducted by the Board Chair and Corporate Governance Committee Chair).

44  Constellation Energy Corporation 2023 Proxy Statement

Corporate Governance

New Director Orientation

New Director Orientation

Comprehensive director orientation is overseen by the Corporate Governance Committee and administered by the Corporate Secretary. The orientation program is tailored to the needs of each new director depending on his or her level of experience serving on other boards and knowledge of the company or energy industry. Materials provided to new directors include information on the company’s vision and strategic direction, financial matters, corporate governance practices, Code of Business Conduct, risk management framework, and other key policies and practices. The onboarding process includes a series of one-on-one meetings with members of senior management and their staff for deep-dive briefings on business units. New directors are also invited to tour various company facilities, depending on their orientation needs and preferences.

Continuing Director Education and Site Visits

Constellation provides continuing education opportunities for incumbent directors on subjects that aid in their development and assist directors to effectively discharge their duties, including, compliance and corporate governance developments, business- specific learning opportunities, and briefing sessions on topics that present special risks and opportunities to the company. The Corporate Governance Committee may recommend committee member rotation if it determines that rotation would enhance a director’s education.

Continuing director education is provided during portions of Board and committee meetings and is focused on topics necessary to enable the Board to effectively consider issues before them at that time (such as new regulatory or accounting standards). Education may take the form of presentations from senior leadership or other subject matter experts within the company, presentations from external advisors, or “white papers” which are deep dives into timely subjects or topics.

Directors are also invited from time to time to tour facilities. During these visits, directors are able to interact directly with employees staffing key functions. Additionally, directors may attend educational seminars and programs sponsored by external organizations. The company covers the cost for any director who wishes to attend external programs and seminars on topics relevant to their service as directors.

Ethics and Compliance

Constellation is committed to maintaining a robust, comprehensive ethics and compliance program and recognizes that an effective program must constantly evolve in the face of changing risks.

Constellation’s Ethics and Compliance office provides governance and oversight of the company’s compliance with its regulatory obligations and is the primary resource for ethics advice and interpretation of the Code of Business Conduct and Supplier Code of Conduct. Our Ethics and Compliance office conducts various risk assessments to help identify compliance risks and assess controls for those risks. It works with business teams on the appropriate design, implementation, and testing of controls for various compliance obligations. Also, our Chief Compliance Officer has a direct reporting relationship to the Audit & Risk Committee.

We maintain a detailed Code of Business Conduct, applicable to all employees, officers, and directors across the enterprise and a Supplier Code of Conduct, which is based on the Code of Business Conduct principles and applies to all Constellation suppliers, including contractors, consultants, and vendors.

The Code of Business Conduct sets out our core values — which include acting with integrity — and addresses a wide range of topics, including conflicts of interest, workplace conduct, safety, protecting confidential information and other company assets, and bribery and corruption. The Code of Business Conduct highlights the importance of speaking up and strictly prohibits any form of retaliation for raising in good faith questions or concerns about potential violations of the Code of Business Conduct or compliance with applicable laws and regulations.

Generally, all employees and certain contract workers must participate in annual Code of Business Conduct training. Additionally, non-represented employees are required to complete an annual certification disclosing potential conflicts of interest and affirming their understanding of the Code of Business Conduct. Completion of the training and certifications is tracked.

We maintain a 24-hour ethics helpline that allows employees, contract workers, suppliers, and the public to report ethics concerns and potential legal or regulatory violations and to pose questions. The helpline has both a phone and web portal option and reporters have the option to remain anonymous. The Ethics and Compliance office oversees the intake, investigation, and resolution of reports of potential compliance violations and violations of the Code of Business Conduct and Supplier Code of Conduct.

We also maintain with Government Affairs four companywide policies that relate to oversight of employee and company interactions with public officials. The policies include various controls and guidance, and employees in various positions are trained on the requirements of the policies. Among other things, the policies require tracking and review of certain requests, referrals, and recommendations from public officials and regular reporting to the Audit & Risk Committee of such requests, referrals and recommendations.

Constellation Energy Corporation 2023 Proxy Statement 45

Director Compensation

Constellation’s director compensation program is designed to enable ongoing attraction and retention of highly qualified directors and to address the time, effort, expertise and accountability required of active board membership. The initial annual retainers for non-employee directors as well as additional fees paid to the independent chair and committee chairs were set prior to our separation from Exelon in February 2022. Following the separation, our non-employee director compensation program was subject to the review and approval of our Board upon the recommendation of the Corporate Governance Committee.

The Corporate Governance Committee is responsible for reviewing and making recommendations to the Board regarding its non-employee director compensation program. The committee is authorized to engage outside advisors and consultants in connection with its review and analysis of director compensation. The committee takes various factors into consideration, including responsibilities of directors generally, Board and committee leadership roles such as the Board Chair and Committee Chairs, as well as the form and amount of compensation paid to directors at comparable companies.

The non-employee director compensation program is comprised of cash and equity components. The Board targets total compensation to be at the median level of compensation paid to directors at the peer group of companies used to determine executive compensation.

Cash Fees

Each non-employee director receives an annual cash retainer for his or her service on the Board, as well as additional cash retainers if he or she serves as the Board Chair or as the chair of a committee. Directors serving in multiple leadership roles will receive incremental compensation for each role. The following table lists the cash retainer amounts in effect during fiscal year 2022. 

(1) All members of the Nuclear Oversight Committee, including the chair, receive a $20,000 retainer.

Directors do not receive additional compensation for attending regularly scheduled board or committee meetings. All board fees are paid quarterly in arrears. New directors joining the Board receive a prorated fee for the quarter based on the date of their election.

Directors may elect to defer any portion of cash compensation into a non-qualified multi-fund deferred compensation plan. Under the plan, each director has an unfunded account where the dollar balance can be invested in one or more of several mutual funds. Fund balances are settled in cash and may be distributed in a lump sum or in annual installment payments upon a director reaching age 65, age 72, or upon departure from the board.

Additionally, directors who serve as members of any special committee receive fees of $5,000 per quarter for as long as the committee continues to meet or is necessary.

46  Constellation Energy Corporation 2023 Proxy Statement

Director Compensation

Equity Compensation

Equity Compensation

A significant portion of director compensation is provided in the form of equity to align the interests of directors with the interests of shareholders. In 2022, Constellation’s non-employee directors received deferred stock units (DSUs) valued at $155,000 that were granted quarterly in arrears. DSUs are credited to a notional account maintained on the books of the company at the end of each calendar quarter based upon the closing price of Constellation common stock on the day the quarterly dividend is paid. DSUs earn dividend equivalents which are reinvested in the deferred stock accounts as additional stock units. The account balance of DSUs will be settled in shares of Constellation common stock and will be distributed in a lump sum or in annual installments based on each director’s election. Directors may opt to receive their DSUs upon reaching age 65, age 72, or upon their departure from the Board.

The table below sets forth the amount of DSUs held by each non-employee director as of December 31, 2022. The balances reported include additional DSUs accumulated as dividend equivalents.

Impact of Separation from Exelon

In connection with the separation from Exelon, in lieu of receiving Constellation shares upon separation on February 1, 2022, the deferred stock unit accounts for Ms. Brlas and Messrs. de Balmann, Lawless and Richardson, who each served on the Board of Directors of Exelon Corporation, were credited with an additional number of Constellation DSUs to ensure that the total dollar value of each director’s DSU account would remain the same as of pre- and post-separation.

Director Stock Ownership Requirement

Our Corporate Governance Principles, adopted February 1, 2022, include a director share ownership requirement of five times the annual cash retainer. All directors are required to meet the minimum stock ownership requirement within five years of their initial election to the Board. Deferred stock units as well as common shares beneficially owned directly or indirectly, including shares held in trust, are counted towards meeting the stock ownership guidelines.

2023 Compensation

The compensation for non-employee directors as well as additional fees paid to the independent chair and committee chairs were set prior to our separation from Exelon in February 2022. Following the separation, our non-employee director compensation program was subject to the review and approval of our Board upon the recommendation of the Corporate Governance Committee. In 2023, neither the Corporate Governance Committee nor the Board recommended or made changes to the non-employee director compensation program. In 2023, the non-employee director compensation program will be reviewed to determine whether any changes to the program are warranted.

Constellation Energy Corporation 2023 Proxy Statement 47

Director Compensation

2022 Director Compensation

2022 Director Compensation

The following table summarizes the compensation paid for each of our non-employee directors who served as a member of the Board and its committees in 2022.

48  Constellation Energy Corporation 2023 Proxy Statement

Ownership of Constellation Stock

Stock Ownership of Directors and Executive Officers

The following table shows the ownership of Constellation common stock as of March 1, 2023, by each director and each named executive officer in the Summary Compensation Table, later in this proxy statement, and for all directors and executive officers as a group. The shares owned by directors and executive officers, both individually and as a group, constitute less than 1% of the total number of shares of common stock outstanding.

Constellation Energy Corporation 2023 Proxy Statement 49

Ownership of Constellation Stock

Other Significant Owners of Constellation Stock

Other Significant Owners of Constellation Stock

Shown in the table below are those owners who are known to Constellation to hold more than 5% of its outstanding common stock. This information is based on the most recent Schedule 13G (or Schedule 13G/A) filings made with the Securities and Exchange Commission.

50  Constellation Energy Corporation 2023 Proxy Statement

Communicating with the Board

Process for Communicating with the Board

Process for Communicating with the Board

Shareholders and other interested persons can communicate with any director or the independent directors as a group by writing to them at Constellation Energy Corporation, Attn: Office of the Corporate Secretary, 1310 Point Street Baltimore, Maryland 21231-3380. The Board has instructed the Corporate Secretary to review communications initially and transmit a summary to the directors and to exclude from transmittal any communications that are commercial advertisements, other forms of solicitation, general shareholder service matters, or individual service or billing complaints (although all communications will be available to the directors upon request). Under the Board policy, the Corporate Secretary will forward to the directors any communication raising substantial issues. All communications are available to the directors upon request.

Shareholders may also report an ethics concern with the Constellation Ethics Hotline by calling (1-844-927-2282). You may also report an ethics concern via email to EthicsOffice@Constellation.com.

Related Person Transactions

Constellation has adopted a written policy on the review, approval or ratification of transactions with related persons, which is overseen by the Corporate Governance Committee and is available on our website. The policy provides that the Corporate Governance Committee will review any proposed, existing, or completed transactions in which the amount involved exceeds $120,000 and in which any related person had, has, or will have a direct or indirect material interest. In general, related persons are directors and executive officers and their immediate family members, as well as shareholders beneficially owning 5% or more of Constellation’s outstanding stock as defined in SEC rules. Related person transactions that are in, or not inconsistent with, the best interests of Constellation are approved by the Corporate Governance Committee and reported to the Board. Related person transactions are disclosed in accordance with applicable SEC and other regulatory requirements.

There were no related person transactions identified for 2022.

Shareholder Engagement

We believe that engaging with our investors provides valuable insights for the Board and its committees into investor perspectives and priorities. During 2022, Constellation’s engagement team, comprising members of the Office of Corporate Governance, Investor Relations, Sustainability, Executive Compensation, and Human Resources departments, met to discuss a wide variety of issues with investors.

In 2022, Constellation contacted the holders of nearly 80% of our outstanding shares with offers to engage. Portfolio managers and governance professionals that accepted the invitation to engage included a significant cross-section of our shareholder base, representing approximately 34% of Constellation’s outstanding shares.

The feedback received from shareholders and other stakeholder groups is shared with each Board committee and the Board, as appropriate, on a regular basis throughout the year. Our Audit & Risk, Corporate Governance, Compensation and Nuclear Oversight committees will consider the adoption or recommend Board approval of suggested enhancements to policies, practices, or disclosures to meet investor concerns or expectations relating to new issues or emerging trends if such action is deemed to be in the best interests of the company and its shareholders.

Constellation Energy Corporation 2023 Proxy Statement 51

Shareholder Engagement

Shareholder Engagement

We believe that our approach to engaging openly with our investors on topics such as environmental strategy, corporate governance, executive compensation, and other human capital management issues drives increased accountability, improves decision making, and ultimately creates long-term value. We plan to generally incorporate the following elements into our shareholder engagement process going forward.

52  Constellation Energy Corporation 2023 Proxy Statement

Proposal 2:

Say-On-Pay: Advisory Vote on Executive Compensation

We are seeking an advisory vote to approve the compensation of our named executive officers for 2022.

This proposal, known as a say-on-pay proposal, gives our shareholders the opportunity to express their views on the compensation of the company’s named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officers and the philosophy, policies and practices described in this proxy statement.

The say-on-pay vote is advisory, and therefore not binding on Constellation, the Compensation Committee, or the Board of Directors. However, the Board and Compensation Committee value the opinions of the company’s shareholders and will take the results of the vote into consideration when evaluating the executive compensation program and making future decisions regarding the compensation of our named executive officers.

Our Board invites you to review the “Compensation Discussion and Analysis” section and the compensation tables and other compensation related disclosures included in this proxy statement.

As discussed in the “Compensation Discussion and Analysis” section of this proxy statement, our Board believes that the company’s executive compensation program, practices and policies drive performance, and align our executives’ interests with those of our shareholders. Accordingly, you may vote to approve or not approve the following advisory resolution on the compensation of the named executive officers at the 2023 Annual Meeting.

Our Board recommends that you vote FOR the following advisory resolution:

RESOLVED, that the company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the company’s proxy statement for the 2023 Annual Meeting of Shareholders pursuant to the rules of the SEC, including the Compensation Discussion and Analysis, the 2022 Summary Compensation Table and the other related tables and disclosure.

Constellation Energy Corporation 2023 Proxy Statement 53

Proposal 3:

Frequency of Future Advisory Votes on Executive Compensation

In addition to providing shareholders with the opportunity to cast a non-binding advisory vote on compensation paid to our named executive officers in Proposal No. 2 in accordance with SEC rules, Constellation is also required to provide its shareholders with the opportunity to cast an advisory vote to determine the frequency of future advisory shareholder votes on compensation paid to the named executive officers. By voting on this Proposal No. 3, shareholders may indicate whether they would prefer an advisory vote on named executive officer compensation once every one, two or three years.

After careful consideration, the Compensation Committee and the Board believe that an annual frequency (i.e., every year) is the optimal frequency for the advisory vote on compensation of our named executive officers. We believe this frequency will continue to enable our shareholders to vote, on an advisory basis, on the most recent executive compensation information that is presented in our proxy statement, leading to more meaningful and timely communication between Constellation and our shareholders on the compensation of our named executive officers.

Shareholders are not voting to approve or disapprove the Board’s recommendation. Instead, you may cast your vote on your preferred voting frequency by choosing any of the following four options with respect to this proposal: “1 year,” “2 years,” “3 years,” or “abstain.”

This say-on-frequency vote is advisory, and therefore not binding on Constellation, the Board, or the Compensation Committee. However, the Board and the Compensation Committee value the opinions expressed by shareholders and will consider the option that receives the highest number of votes cast as the frequency that is preferred by our shareholders when determining the frequency of future advisory votes on compensation of our named executive officers.

54  Constellation Energy Corporation 2023 Proxy Statement

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis section and, based on such review and discussion, the committee recommended that the Board approve the inclusion of the Compensation Discussion and Analysis in this report.

The foregoing Compensation Committee Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of Constellation under the Securities Act or the Exchange Act, except to the extent that Constellation specifically incorporates the Compensation Committee Report by reference therein.

Executive Summary

For purposes of this Compensation Discussion and Analysis and the related executive compensation tables, the individuals referred to as the “named executive officers” or “NEOs” are Constellation’s President and Chief Executive Officer, Executive Vice President and Chief Financial Officer and the three most highly compensated executive officers of Constellation based on fiscal year 2022 compensation.

Specifically, the individuals determined to be our NEOs based on 2022 compensation are:

Constellation Energy Corporation 2023 Proxy Statement 55

Compensation Committee Report

Executive Summary

 

(1)	See the reconciliation to the corresponding GAAP measures set forth in Appendix A of this proxy statement.

56  Constellation Energy Corporation 2023 Proxy Statement

Compensation Discussion and Analysis

Executive Summary

Constellation Energy Corporation 2023 Proxy Statement 57

Compensation Discussion and Analysis

Executive Summary

58  Constellation Energy Corporation 2023 Proxy Statement

Compensation Discussion and Analysis

Executive Summary

The 2021–2023 PShare award target number of shares was converted into target Constellation shares at the date of separation based on the separation value ratio with an adjustment based on the Exelon TSR multiplier for the period ending December 31, 2021. A Constellation scorecard aligned with the Constellation business strategy was established with the design discussed under the long-term incentive program section of this Compensation Discussion and Analysis.

The separation value ratio used to convert outstanding unvested Exelon awards to Constellation awards utilized the five-day volume-weighted average stock price (VWAP) before and after the separation. The Exelon pre-separation share price of $56.81 was based on the VWAP for five days prior to the separation. The Constellation post-separation share price of $51.16 was based on the VWAP for five days after the separation.

 

Shareholder Engagement

The Compensation Committee reviews executive compensation, taking into consideration input received through engagement with investors. In 2022, we invited shareholders owning approximately 80% of our outstanding stock to engage. Shareholders holding an aggregate of approximately 34% of our common stock accepted the invitation. We engaged with these shareholders regarding the company’s business strategy, corporate governance policies, sustainability, human capital management, and compensation practices. In general, shareholders did not note any significant concerns with Constellation’s executive compensation programs. Going forward, feedback from shareholders will be solicited at appropriate times during the year including in connection with the annual meeting of shareholders and the Compensation Committee’s review of the executive compensation program.

Given that Constellation first became a publicly traded company in 2022, our first shareholder advisory vote on executive pay (“say-on-pay”) will occur during our 2023 Annual Meeting of Shareholders. We believe the say-on-pay advisory vote provides shareholders an important opportunity to provide feedback on our executive compensation programs. The Compensation Committee intends to take into account the outcome of this vote and feedback obtained through engagement when evaluating the company’s executive compensation programs.

 

Executive Compensation Best Practices

 

What We Do:		What We Don’t Do:
•  Align pay for performance •  Maintain significant stock ownership requirements for Directors and Executive Officers •  Cap incentive awards and conduct an annual risk assessment of the compensation programs •  Subject change-in-control benefits to double trigger vesting •  Retain an independent compensation consultant advises the Compensation Committee •  Provide limited perquisites based on sound business rationale •  Subject incentive compensation awards to clawback provisions •  Review of pay equity by an independent third party •  Engage in year-round shareholder outreach •  Prohibit hedging, short sales, derivative transactions or pledging of Company stock •  Assess our programs against peer companies and best practices •  Set appropriate levels of “stretch” in incentive targets		•  No guaranteed minimum payout of AIP or LTIP programs •  No employment agreements •  No excise tax gross-ups for change-in-control agreements •  The value of LTIP awards is not included in pension or severance calculations •  No option repricing or buyouts without stockholder approval