UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. )

Filed by the Registrant  ☑

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

CenterPoint Energy, Inc.

(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

      Always There.^®

CenterPoint Energy, Inc.

Notice of Annual Meeting of Shareholders

to be held on April 23, 2021

and Proxy Statement

March 12, 2021

Dear Fellow Shareholders:

We are pleased to invite you to attend our annual shareholder meeting to be held on April 23, 2021, at 9:00 a.m. central time in our auditorium located at 1111 Louisiana Street in Houston, Texas.

As explained in the enclosed proxy statement, at this year’s meeting you will be asked to vote (i) for the election of nine directors, (ii) for the ratification of the appointment of CenterPoint Energy’s independent registered public accounting firm and (iii) for the approval, on an advisory basis, of CenterPoint Energy’s executive compensation, and to consider any other business that may properly come before the meeting.

Your vote is very important to us – participate in the future of CenterPoint Energy and exercise your shareholder right by voting your shares right away.

Only holders of record of CenterPoint Energy common stock at the close of business on February 26, 2021 or their proxy holders, may vote at the meeting. Attendance at the meeting is limited to holders of our common stock or their proxy holders and CenterPoint Energy guests. Only holders of our common stock or their valid proxy holders may address the meeting.

Please review the proxy card for instructions on how you can vote your shares of CenterPoint Energy common stock over the internet, by telephone or by mail. It is important that all holders of CenterPoint Energy common stock, regardless of the number of shares owned, participate in the affairs of the Company. At CenterPoint Energy’s 2020 Annual Shareholder Meeting, approximately 86 percent of the Company’s outstanding shares of common stock was represented in person or by proxy.

Thank you for your continued investment in CenterPoint Energy.

Sincerely,

Milton Carroll Executive Chairman of the Board				David J. Lesar President and Chief Executive Officer

Table of Contents

Table of Contents (continued)

Always There.®

Notice of Annual Meeting of Shareholders

Dear Shareholders:

You are cordially invited to attend the 2021 annual meeting of shareholders of CenterPoint Energy, Inc. This is your notice for the meeting.

TIME AND DATE

9:00 a.m. Central Time on April 23, 2021.

PLACE

The CenterPoint Energy auditorium at 1111 Louisiana, Houston, Texas.

ITEMS OF BUSINESS

RECORD DATE

Holders of record of CenterPoint Energy common stock at the close of business on February 26, 2021 are entitled to vote.

PROXY VOTING

Each share of CenterPoint Energy common stock entitles the holder to one vote on each matter to be voted on at the meeting. You may vote either by attending the meeting or by proxy. For specific voting information, please see “Frequently Asked Questions About Voting” beginning on page 1 of the proxy statement that follows. Even if you plan to attend the meeting, please sign, date and return the enclosed proxy card or submit your proxy using the Internet or telephone procedures described on the proxy card.

Sincerely,

Vincent A. Mercaldi

Corporate Secretary

Dated and first mailed

to shareholders

on or about March 12, 2021

Important Notice Regarding the Availability of Proxy Materials

for the Annual Shareholder Meeting to be Held April 23, 2021

The proxy statement and annual report to shareholders are available at:

http://materials.proxyvote.com/15189T

CENTERPOINT ENERGY, INC.

1111 Louisiana

Houston, Texas 77002

(713) 207-1111

For deliveries by U.S. Postal Service:

P.O. Box 4567

Houston, Texas 77210-4567

Proxy Statement

FREQUENTLY ASKED QUESTIONS ABOUT VOTING

On what am I voting?

Who may vote?

Holders of our common stock recorded in our stock register at the close of business on February 26, 2021 may vote at the meeting. As of that date, there were 551,580,936 shares of our common stock outstanding.

How many votes do I have?

You have one vote for each share of our common stock you owned as of the record date for the meeting.

How do I vote?

Your vote is important. You may vote in person at the meeting or by proxy. We recommend you vote by proxy even if you plan to attend the meeting. You may always change your vote at the meeting if you are a holder of record or have a proxy from the record holder. Giving us your proxy means that you authorize us to vote your shares of our common stock at the meeting in the manner you indicated on your proxy card. You may also provide your proxy using the Internet or telephone procedures described on the proxy card.

You may vote for or against each director nominee under Item 1 (election of directors) and the proposals under Item 2 (ratification of appointment of the independent registered public accounting firm) and Item 3 (advisory vote on executive compensation), or you may abstain from voting on these items. If you give us your proxy but do not specify how to vote, we will vote your shares of our common stock in accordance with the Board’s recommendations.

Frequently Asked Questions About Voting (continued)

What are the Board’s recommendations?

The Board’s recommendations are set forth together with the description of each item in this proxy statement. In summary, the Board and, with respect to the ratification of the appointment of the independent registered public accounting firm, the Audit Committee, recommends a vote as follows:

If any other matters properly come before the meeting, we will vote the shares of common stock in accordance with our best judgment and discretion.

What if I change my mind after I have voted?

You may revoke your proxy before it is voted by:

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

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

Brokerage firms generally have the authority to vote their customers’ unvoted shares of common stock on certain “routine” matters as determined by the New York Stock Exchange. If your shares of our common stock are held in the name of a broker, bank or other nominee, such nominee can vote your shares for the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2021 if you do not timely provide your proxy because this matter is considered “routine” under the applicable rules. However, no other items are considered “routine” and may not be voted on by your nominee without your instruction.

For all items other than ratification of the appointment of our independent registered public accounting firm, brokers holding shares of our common stock must vote according to specific instructions they receive from the beneficial owners of those shares because the New York Stock Exchange precludes brokers from exercising voting discretion on certain proposals without specific instructions from the beneficial owner as to how to vote. Brokers cannot vote on Item 1 (election of directors) or Item 3 (advisory vote on executive compensation) without instructions from the beneficial owners. If you do not instruct your broker how to vote with respect to Item 1 or Item 3, your broker will not vote for you with respect to those items.

Do I need a ticket to attend the meeting?

To be admitted to the meeting, you must provide proof of ownership of our common stock and proof of identification. If you plan to attend the meeting and your shares of common stock are held by banks, brokers, stock plans or other holders of record (in “street name”), you will need to provide proof of ownership. Examples of proof of ownership include a recent brokerage statement or letter from your broker or bank. All holders of our common stock will be required to present valid picture identification, such as a driver’s license, before being admitted to the meeting.

Frequently Asked Questions About Voting (continued)

What constitutes a quorum?

To carry on the business of the meeting, we must have a quorum. This means at least a majority of the shares of our common stock outstanding as of the record date must be represented at the meeting, either by proxy or in person. Shares of our common stock owned by CenterPoint Energy are not voted and do not count for this purpose.

Abstentions and proxies submitted by brokers that do not indicate a vote because they do not have discretionary authority and have not received instructions as to how to vote on a proposal (so-called “broker non-votes”) will be considered as present for quorum purposes.

What vote is required to approve each of the proposals?

Under our third amended and restated bylaws (bylaws), directors are elected by a majority of the votes cast at the meeting. Under our bylaws, this means that the number of votes cast “for” a director must exceed the number of votes cast “against” that director. Abstentions and broker non-votes will not affect the outcome of the vote. For additional information on the election of directors, see “Item 1: Election of Directors—Majority Voting in Director Elections.”

Each of the ratification of the appointment of independent registered public accounting firm in Item 2 and the approval of the resolution included in Item 3 regarding the advisory vote on executive compensation requires the affirmative vote of a majority of the shares of our common stock entitled to vote at the meeting and voted for or against the item. Abstentions and broker non-votes (none of which are expected for Item 2) will not affect the outcome of the vote on these items.

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

CenterPoint Energy is requesting your proxy for the annual shareholder meeting and will pay all the costs of requesting shareholder proxies, including a fee of $13,000 plus expenses to Morrow Sodali LLC, 470 West Ave, Stamford, CT 06902, who will help us solicit proxies. We can request proxies through the mail, in person, or by telephone, fax or Internet. We can use directors, officers and other employees of CenterPoint Energy to request proxies. Directors, officers and other employees will not receive additional compensation for these services. We will reimburse brokerage firms, nominees, fiduciaries, custodians and other agents for their expenses in distributing proxy material to the beneficial owners of our common stock.

ITEM 1: ELECTION OF DIRECTORS

Item 1: Election of Directors (continued)

Executive Summary

Overview. In this section, we introduce the nine nominees for election to our Board of Directors. These nominees bring relevant expertise and skills and represent a diverse mix of professional experience, backgrounds and perspectives appropriate to oversee our Company’s businesses and operations. In addition, we describe our corporate governance practices and policies. Strong corporate governance is a priority for the Company and the Board of Directors, is in the best interests of our shareholders and is critical to the Company’s long-term success. We have implemented corporate governance and business conduct policies and procedures designed to help us operate effectively with accountability, integrity and transparency, some of which are reflected below.

Nominees for Directors

Each of our directors will be elected at this year’s meeting to a one-year term expiring at the annual meeting of shareholders in 2022.

If any nominee becomes unavailable for election, the Board of Directors can name a substitute nominee, and proxies will be voted for the substitute nominee pursuant to discretionary authority. Proxies cannot be voted for a greater number of persons than the number of nominees named below.

Unless otherwise indicated or the context otherwise requires, when we refer to periods prior to September 1, 2002, CenterPoint Energy should be understood to mean or include the public companies that were its predecessors.

Item 1: Election of Directors (continued)

Board Composition Highlights

Our Board of Directors believes that having a diverse mix of directors with complementary qualifications, skills and expertise is essential to effectively discharging its oversight responsibility while advancing the Company’s long-term business strategy. Accordingly, the Board of Directors is focused on striking an appropriate balance between retaining directors with a deep knowledge of the Company and adding new directors with a fresh perspective, among other factors that are set forth below with respect to the nominees for election this year.

Item 1: Election of Directors (continued)

Our Board of Directors collectively represents the following backgrounds, key skills and competencies:

Listed below are the biographies of each director nominee. The biographies include information regarding each individual’s service as a director of the Company, business experience, director positions at public companies held currently or at any time during the last five years, and the experiences, qualifications, attributes or skills that caused the Governance Committee and the Board to determine that the person should serve as a director for the Company.

The nine nominees for election at the annual meeting are listed below.

Item 1: Election of Directors (continued)

Item 1: Election of Directors (continued)

Item 1: Election of Directors (continued)

Item 1: Election of Directors (continued)

Item 1: Election of Directors (continued)

The Board of Directors recommends a vote FOR the election of each of the nominees as directors.

Director Nomination Process

In assessing the qualifications of candidates for nomination as director in addition to qualifications set forth in our bylaws, the Governance Committee and the Board consider the following:

At least annually, the Governance Committee reviews the overall composition of the Board, including the skills represented by incumbent directors, and the need for Board refreshment or expansion. The Board evaluates the makeup of its membership in the context of the Board as a whole, with the objective of recommending a group that (i) can effectively work together using its diversity of experience, skills, perspectives and backgrounds to see that the Company is well-managed with a focus of achieving the Company’s long-term business strategy and (ii) represents the interests of the Company and its shareholders. In seeking new director candidates, the Governance Committee and the Board consider the skills, expertise and qualities that will be required to effectively oversee management of the

Item 1: Election of Directors (continued)

business and affairs of the Company. The Governance Committee and the Board also consider the diversity of the Board in terms of the geographic, gender, age and ethnic makeup of its members. The Board believes that a diverse membership enhances the Board’s deliberations and promotes inclusiveness.

Suggestions for potential nominees for director can come to the Governance Committee from a number of sources, including incumbent directors, officers, executive search firms and others. If an executive search firm is engaged for this purpose, the Governance Committee has sole authority with respect to the engagement. The Governance Committee will also consider director candidates recommended by shareholders. The extent to which the Governance Committee dedicates time and resources to the consideration and evaluation of any potential nominee brought to its attention depends on the information available to the Committee about the qualifications and suitability of the individual, viewed in light of the needs of the Board, and is at the Committee’s discretion. The Governance Committee and the Board evaluate the desirability for incumbent directors to continue on the Board following the expiration of their respective terms, taking into account their contributions as Board members, the benefit that results from increasing insight and experience developed over a period of time and the skills needed to achieve the Company’s long-term business strategy.

On May 6, 2020, the Company entered into a governance arrangement agreement with Elliott International, L.P. and Elliott Associates, L.P., pursuant to which the Company agreed to appoint Messrs. Lesar and Smitherman as directors to further bolster the composition of the Board with their leadership experience and skillsets tailored for the Company’s opportunities, including service on the Business Review and Evaluation Committee. Messrs. Lesar and Smitherman were each elected to a vacant seat on the Board effective May 6, 2020. Additionally, in connection with the Board’s ongoing refreshment process, Mr. Cummings and Ms. Cloonan were identified as director candidates and recommended to the Board by Messrs. Lesar and Carroll, respectively. The Governance Committee evaluated and recommended their appointment to the Board. The Board elected Mr. Cummings and Ms. Cloonan to the Board effective July 1, 2020 and February 19, 2021, respectively. Following the Annual Meeting, the Board expects to reduce the size of the Board to nine directors.

Our bylaws provide that a shareholder may nominate a director for election if the shareholder sends a notice to our Corporate Secretary, which must be received at our principal executive offices between October 25, 2021 and January 23, 2022. The bylaws require that the notice must contain prescribed information, including, among other things, the name and address of the shareholder, the number of shares owned beneficially by the shareholder, the name and address of each of the persons with whom the shareholder is acting in concert, the number of shares of capital stock beneficially owned by each such person with whom the shareholder is acting in concert, and a description of all arrangements or understandings between the shareholder and each nominee and any other persons with whom the shareholder is acting in concert pursuant to which the nomination or nominations are made, as well as other procedural requirements. The shareholder must also provide the documentation and information about the nominee required by our bylaws, including information about the nominee that would be required to be disclosed in the proxy statement. If any of the foregoing information changes or requires supplementation, the proponent must update the information at the times provided in our bylaws. Except as required under the proxy access provisions of our bylaws, CenterPoint Energy is not required to include any shareholder proposed nominee in the proxy statement. You may obtain a copy of the bylaws describing the requirements for nomination of director candidates by shareholders on our website at https://investors.centerpointenergy.com/governance.

Proxy Access Requirements

In February 2017, we proactively adopted amendments to our bylaws to implement proxy access for our shareholders. These proxy access amendments permit a nominating group of up to 20 shareholders owning three percent or more of our common stock continuously for at least three years to nominate and include in our proxy materials for an annual meeting of shareholders director candidates constituting up to the greater of (i) 20 percent (or if such amount is not a whole number, the closest whole number below 20 percent) of our Board or (ii) two, provided that the shareholder (or group) and each nominee satisfy the requirements specified in our bylaws. An eligible shareholder wishing to

Item 1: Election of Directors (continued)

nominate a candidate for election to the Board at the 2022 annual meeting of our shareholders, in accordance with the proxy access provisions in our bylaws, must provide such notice no earlier than November 24, 2021 and no later than December 24, 2021. Any such notice and accompanying nomination materials must meet the requirements set forth in our bylaws, which are publicly available at http://investors.centerpointenergy.com/governance.

Annual Board Self-Assessment and Director Peer Evaluation

The Board of Directors conducts a self-assessment of its performance and effectiveness as well as that of the four standing committees on an annual basis. The purpose of the self-assessment is to track progress from year to year and to identify ways to enhance the Board’s and its Committees’ effectiveness. Further, the Board of Directors, as part of its self-assessment, evaluates management’s preparation for Board and Committee meetings and the content presented at such meetings. As part of the assessment, each director completes a written questionnaire developed by the Governance Committee to provide feedback on the effectiveness of the Board and its Committees.

Additionally, each director completes an individual evaluation for each of the other directors. The collective ratings and comments of the directors are compiled and presented by Mr. Nesbitt, the chairman of the Governance Committee, or by Mr. Carroll, with respect to Mr. Nesbitt’s evaluation, to the Governance Committee and the full Board for discussion and action in connection with the director nomination process.

Director Independence

The Board of Directors determined that Messrs. Cummings, McLean*, Nesbitt, Pound, Smith, Smitherman and Wareing** and Mses. Biddle, Cloonan and Rheney* are independent within the meaning of the listing standards for general independence of the New York Stock Exchange.

Under the listing standards, a majority of our directors must be independent, and the Audit, Compensation and Governance Committees are each required to be composed solely of independent directors. The standards for audit committee and compensation committee membership include additional requirements under rules of the Securities and Exchange Commission. The Board has determined that all of the members of each of its standing committees meet the applicable independence requirements. The listing standards relating to general independence require an affirmative determination by the Board that the director has no material relationship with the listed company and contain a listing of several specific relationships that preclude independence.

As contemplated by New York Stock Exchange rules then in effect, the Board adopted categorical standards in 2004 to assist in making determinations of independence. Under the rules then in effect, relationships falling within the categorical standards were not required to be disclosed or separately discussed in the proxy statement in connection with the Board’s independence determinations.

The categorical standards cover two types of relationships. The first type involves relationships of the kind addressed in either:

Item 1: Election of Directors (continued)

For those relationships, the categorical standards are met if the relationship neither requires disclosure nor precludes a determination of independence under either set of rules.

The second type of relationship is one involving charitable contributions by CenterPoint Energy to an organization in which a director is an executive officer. In that situation, the categorical standards are met if the contributions do not exceed the greater of $1 million or 2% of the organization’s gross revenue in any of the last three years.

In making its subjective determination regarding the independence of Messrs. Cummings, McLean*, Nesbitt, Pound, Smith, Smitherman and Wareing** and Mses. Biddle, Cloonan and Rheney*, the Board reviewed and discussed additional information provided by the directors and the Company with regard to each director’s business and personal activities as they related to the Company and Company management. The Board considered the transactions in the context of the New York Stock Exchange’s objective listing standards, the categorical standards noted above and the additional standards established for members of audit, compensation and governance committees.

Code of Ethics and Ethics and Compliance Code

We have a Code of Ethics for our Chief Executive Officer and Senior Financial Officers, which group consists of our Chief Financial Officer, Chief Accounting Officer, Treasurer and Assistant Controller. We will post information regarding any amendments to, or waivers of, the provisions of this code applicable to these officers at the website location referred to below under “Website Availability of Documents.”

We also have an Ethics and Compliance Code applicable to all directors, officers and employees. This code addresses, among other things, issues required to be addressed by a code of business conduct and ethics under New York Stock Exchange listing standards. Any waivers of this code for executive officers or directors may be made only by the Board of Directors or a committee of the Board and must be promptly disclosed to shareholders.

In 2020, no waivers of our Code of Ethics or our Ethics and Compliance Code were granted.

Conflicts of Interest and Related-Party Transactions

The Governance Committee will address and resolve any issues with respect to related-party transactions and conflicts of interest involving our executive officers, directors or other “related persons” under the applicable disclosure rules of the Securities and Exchange Commission.

Our Ethics and Compliance Code provides that all directors, executive officers and other employees should avoid actual conflicts of interest as well as the appearance of a conflict of interest, and our Code of Ethics for our Chief Executive Officer and Senior Financial Officers similarly obligates the employees covered by that Code of Ethics (our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Treasurer and Assistant Controller) to handle actual or apparent conflicts of interest between personal and professional relationships in an ethical manner. Under our Ethics and Compliance Code, prior approval is required for any significant financial interest with suppliers, partners, subcontractors or competitors. Any questionable situation is required to be disclosed to the Legal Department or an employee’s direct manager.

Pursuant to our Corporate Governance Guidelines, the Governance Committee Charter and our Related-Party Transaction Approval Policy, the Board has delegated to the Governance Committee the responsibility for reviewing and resolving any issues with respect to related-party transactions and conflicts of interests involving executive officers or directors of the Company or other related persons under the applicable rules of the Securities and Exchange Commission. The Company’s Corporate Governance Guidelines require that (i) each director shall promptly

Item 1: Election of Directors (continued)

disclose to the Chairman of the Board and the Chairman of the Governance Committee any potential conflicts of interest he or she may have with respect to any matter involving the Company and, if appropriate, recuse himself or herself from any discussions or decisions on any of these matters, and (ii) the Chairman of the Board shall promptly advise the Governance Committee of any potential conflicts of interest he or she may have with respect to any matter involving the Company and, if appropriate, recuse himself or herself from any discussions or decisions on any of these matters.

The Office of the Corporate Secretary periodically gathers information from directors and executive officers regarding matters involving potential conflicts of interest or related-party transactions and provides that information to the Governance Committee for review. Directors and executive officers are also required to inform the Company immediately of any changes in the information provided concerning related-party transactions in which the director or executive officer or other related person was, or is proposed to be, a participant. In accordance with our Related-Party Transaction Approval Policy, the standard applied in approving the transaction is whether the transaction is in the best interests of the Company and its shareholders.

There were no related-party transactions in 2020 that were required to be reported pursuant to the applicable disclosure rules of the Securities and Exchange Commission.

Majority Voting in Director Elections

Our bylaws include a majority voting standard in uncontested director elections. This standard applies to the election of directors at this meeting. To be elected, a nominee must receive more votes cast “for” that nominee’s election than votes cast “against” that nominee’s election. In contested elections, the voting standard will be a plurality of votes cast. Under our bylaws, contested elections occur where, as of a date that is 14 days in advance of the date we file our definitive proxy statement with the Securities and Exchange Commission (regardless of whether or not thereafter revised or supplemented), the number of nominees exceeds the number of directors to be elected.

Our Corporate Governance Guidelines include director resignation procedures. In brief, these procedures provide that:

Our bylaws and our Corporate Governance Guidelines can be found on our website at https://investors.centerpointenergy.com/governance.

Item 1: Election of Directors (continued)

Board Leadership

The offices of Chairman of the Board and Chief Executive Officer are currently separate and have been separate since the formation of the Company as a new holding company in 2002. The Board believes that the separation of the two roles continues to provide, at present, the best balance of these important responsibilities with the Chairman directing board operations and leading oversight of the Chief Executive Officer and management, and the Chief Executive Officer focusing on developing and implementing the Company’s board-approved strategic vision and managing its day-to-day business. The Board believes that separating the offices of Chairman of the Board and Chief Executive Officer, coupled with regular executive sessions with only independent directors present, helps strengthen the Board’s independent oversight of management and provides an opportunity for the Board members to have more direct input to management in shaping the organization and strategy of the Company. A presiding independent director (typically the chairman of the Governance Committee) leads the executive sessions. The presiding director provides the independent directors with a key means for communication and collaboration.

The Board’s Role in Risk Oversight

CenterPoint Energy is a public utility holding company that, through its subsidiaries, owns and operates electric transmission, distribution and generation facilities and natural gas distribution facilities, provides energy performance contracting and sustainable infrastructure services and holds interests in a midstream master limited partnership. Risks are inherent in these businesses and investments, including, among other risks, regulatory and compliance risks, safety and operational risks, financial risks, environmental and climate risks and cybersecurity risks. The Board of Directors has responsibility for and is actively involved in the oversight of risks that could impact the Company. Our Corporate Governance Guidelines specify that the Board has ultimate oversight responsibility for the Company’s system of enterprise risk management.

Management is responsible for developing and implementing the Company’s program of enterprise risk management. A risk oversight committee, which is composed of senior executives from across the Company, monitors and oversees risks facing the Company. The Company’s General Counsel facilitates risk oversight committee meetings. The Committee provides risk assessment and control oversight for certain business activities, among other things. The Company’s enterprise risk management function further supports executive management’s, operational management’s and functional management’s execution of the Company’s strategic business objectives by conducting ongoing risk assessments and assisting with risk mitigation planning.

Throughout the year, the Board participates in reviews with management of the Company’s risk management process, the major risks facing the Company and steps taken to mitigate those risks. Board reviews include the following areas, among others:

Item 1: Election of Directors (continued)

In addition to these reviews, in 2020, for example, management’s corporate response planning team provided the Board with periodic updates on the Company’s COVID-19 response efforts, including, among other things, precautions and protocols developed to mitigate such risks in an effort to protect the Company’s employees and customers and maintain business continuity as a provider of an essential service.

To help the Board carry out its responsibility for risk oversight, the Board’s standing committees focus on the following specific key areas of risk:

The Board believes that the administration of its risk oversight function has not affected its leadership structure. In reviewing the Company’s compensation program, the Compensation Committee has made an assessment of whether compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company and has concluded that they do not create such risks as presently constituted.

Environmental, Social and Governance Oversight

As noted in the table above, the Board has charged the Governance Committee with oversight responsibility of the Company’s environmental matters as well as assessing its sustainability strategy and initiatives. The Governance Committee receives regular reports from management on the Company’s environmental and sustainability activities and risks, including risks related to climate change, among others. The Governance Committee provides periodic updates to the Board on the Company’s sustainability strategy and initiatives. The Compensation Committee assists the Board in discharging its oversight responsibility for the Company’s human capital management matters, including its diversity and inclusion initiatives and supplier diversity program, among other programs. Management provides regular updates to the Compensation Committee on human capital management strategy and programs, and the Board is kept apprised of any developments in these areas. Additionally, management periodically provides updates directly to the Board on the Company’s environmental and sustainability activities as well as its diversity and inclusion initiatives.

The Company voluntarily discloses key environmental, social and governance (“ESG”) matters and metrics in its Corporate Responsibility Report that follows the Global Reporting Initiative (“GRI”) framework and has been prepared in accordance with GRI Standards: Core Option. The Company has also disclosed information using the Sustainability Accounting Standards Board (“SASB”) standards and incorporated both the Edison Electric Institute (“EEI”) and American Gas Association (“AGA”) Version 2 Templates into its annual sustainability reporting activities. This Corporate Responsibility Report reaffirmed the Company’s carbon policy, including its carbon emissions reduction goals, detailed the Company’s diversity and inclusion initiatives and provided an overview of the Company’s response to COVID-19, among other key ESG disclosures. The Company’s most recent Corporate Responsibility Report, published in November 2020, is available on its website at www.centerpointenergy.com/responsibility, in addition to the GRI Index, SASB Index and EEI and AGA Version 2 Templates. Unless specifically stated herein, documents and information on CenterPoint Energy’s website are not incorporated by reference in this proxy statement.

Item 1: Election of Directors (continued)

Executive Succession Planning and Leadership Development

As part of the Company’s leadership transition, our former President and Chief Executive Officer Scott Prochazka departed the organization in February 2020. Upon such departure, the Board conducted a search process to select a permanent Chief Executive Officer. During the Board’s search process, Mr. John W. Somerhalder II served as the Company’s Interim President and Chief Executive Officer. Effective July 1, 2020, the Board appointed Mr. David J. Lesar to serve as the Company’s permanent President and Chief Executive Officer, and Mr. Somerhalder resigned from his interim officer position and his director position effective June 30, 2020. For further information, see “Chief Executive Officer Search Committee” below.

In connection with the appointment of Mr. Lesar as the Company’s President and Chief Executive Officer, the Board, in conjunction with management, is refreshing its current executive succession plan for the Company, which, among other things, is intended to identify senior executive talent and provide development opportunities. As part of this refresh process, the Company has taken into account feedback from shareholders received during its shareholder engagement program. For further information on the Company’s outreach efforts in 2020, see “Shareholder Engagement” below.

Director Attendance

Last year, the Board met 20 times, and the standing committees met a total of 24 times. Each incumbent director attended more than 75% of the meetings of the Board of Directors and each of the committees on which he or she served.

Directors are expected to attend annual meetings of shareholders. All then-current directors attended the 2020 annual meeting of shareholders.

Board Organization and Committees

The Board oversees the management of the Company’s business and affairs. The Board appoints committees to help carry out its duties. Messrs. Carroll and Lesar do not serve on any standing committees. The following table sets forth the standing committees of the Board and their members as of the date of this proxy statement, as well as the number of meetings each committee held during 2020:

Item 1: Election of Directors (continued)

Item 1: Election of Directors (continued)

Business Review and Evaluation Committee

In May 2020, the Board established the Business Review and Evaluation Committee as a non-standing committee of the Board to provide advice and recommendations to the Board to evaluate and execute on a comprehensive range of potential value-maximizing strategic business actions and alternatives related to the Company’s current configuration and alignment of businesses, assets and other ownership interests. In October 2020, the Business Review and Evaluation Committee completed its review and made final recommendations to the full Board for its consideration. CenterPoint Energy’s business strategy incorporated certain recommendations of the Business Review and Evaluation Committee, which the Company announced during its Investor Day in December 2020. The Business Review and Evaluation Committee was comprised of four members, including Mr. Lesar as its chairman and Messrs. Nesbitt, Smith and Smitherman.

Chief Executive Officer Search Committee

Upon the departure of the Company’s President and Chief Executive Officer in February 2020, the Board established a non-standing Chief Executive Officer Search Committee to oversee the search process to identify potential candidates to serve as the Company’s permanent Chief Executive Officer. The Chief Executive Officer Search Committee conducted a comprehensive and robust search, supported by a leading executive recruiting firm. This search ultimately resulted in the appointment of Mr. Lesar as the President and Chief Executive Officer in July 2020. Mr. Smith chaired the Chief Executive Officer Search Committee, and Mses. Biddle and Rheney and Messrs. Nesbitt and Pound also served on the committee.

Item 1: Election of Directors (continued)

Executive Sessions of the Board

Our Corporate Governance Guidelines provide that the members of the Board of Directors who are not officers of CenterPoint Energy will hold regular executive sessions without management participation. If at any time the non-management directors include one or more directors who do not meet the listing standards of the New York Stock Exchange for general independence, the Board must hold an executive session at least once each year including only the non-management directors who are also independent. An executive session of independent directors is currently scheduled in conjunction with each regular meeting of the Board of Directors. Currently, the Governance Committee Chairman (Mr. Nesbitt) presides at these sessions.

Shareholder Engagement

The Company believes that good governance practices include maintaining a consistent and transparent dialogue throughout the year with our shareholders, which helps contribute to the Company’s long-term success. Each year, we engage in shareholder outreach through various engagement channels including direct meetings, analyst conferences and road shows, among others, and proactively solicit feedback. We also reach out to the proxy governance teams of certain of our large institutional investors to solicit feedback on a range of topics, including, among other topics, our executive compensation program, including short-term and long-term incentive plan design and executive succession planning, ESG matters, including our corporate governance practices such as board composition and refreshment, environmental and sustainability matters, such as climate change and our carbon emissions reduction targets, human capital management, including our diversity and inclusion initiatives and COVID-19 response, and proxy statement disclosure.

In response to the outcome of the 2020 advisory vote on the compensation of our named executive officers, commonly known as a “say-on-pay” vote, CenterPoint Energy solicited feedback and perspectives from our shareholders, particularly with respect to our executive compensation program. As part of this process, we contacted shareholders representing 64% of our outstanding shares of common stock during 2020, and shareholders representing 42% of our outstanding shares agreed to engage with us. Key members of our executive leadership representing Human Resources, Investor Relations, Environmental and Corporate Governance, along with our Compensation Committee Chair in certain instances, participated in our shareholder engagement. For further information on the results of our 2020 “say-on-pay” vote, the shareholder feedback we received and our responses thereto, please refer to “Compensation Discussion and Analysis—Executive Summary—Shareholder Outreach and Say-On-Pay.”

At this year’s meeting, our shareholders will again have the opportunity to cast an advisory vote on the compensation of our named executive officers. This vote provides our shareholders the opportunity to express their views regarding the compensation program for our named executive officers as disclosed in this proxy statement. As an advisory vote, the say-on-pay vote at the meeting will not be binding upon CenterPoint Energy or the Board of Directors. However, the Board of Directors values the opinions expressed by our shareholders, and the Compensation Committee will consider the outcome of the vote when making future compensation decisions for our named executive officers. For additional information, please refer to “Advisory Vote on Executive Compensation (Item 3).”

Item 1: Election of Directors (continued)

At our 2017 annual meeting of shareholders, we conducted an advisory vote on the frequency of future shareholder advisory votes on executive compensation, at which the Board of Directors recommended that our shareholders vote in favor of holding annual say-on-pay votes instead of the other options presented. At our 2017 annual meeting of shareholders, the shares of our common stock that voted in favor of one of the three available frequency recommendations (excluding abstentions and broker non-votes) were as follows:

Consistent with the results of both the 2011 and 2017 advisory votes, we will continue to hold future say-on-pay votes annually until we next hold an advisory vote on the frequency of say-on-pay votes in 2023 as required under Securities and Exchange Commission rules.

Communications with Directors

Interested parties who wish to make concerns known to the non-management directors may communicate directly with the non-management directors by making a submission in writing to “Board of Directors (independent members)” in care of our Corporate Secretary at the address indicated on the first page of this proxy statement. Aside from this procedure for communications with the non-management directors, the entire Board of Directors will receive communications in writing from shareholders. Any such communications should be addressed to the Board of Directors in care of the Corporate Secretary at the same address.

Website Availability of Documents

CenterPoint Energy’s Annual Report on Form 10-K, Corporate Governance Guidelines, the charters of the Audit Committee, Compensation Committee, Finance Committee and Governance Committee, the Code of Ethics and the Ethics and Compliance Code can be found on its website at https://investors.centerpointenergy.com/governance. Additionally, CenterPoint Energy’s Corporate Responsibility Report and related disclosure can be found on its website at www.centerpointenergy.com/responsibility. Unless specifically stated herein, documents and information on CenterPoint Energy’s website are not incorporated by reference in this proxy statement.

Compensation of Directors

The Governance Committee of the Board oversees fee levels and other elements of compensation for CenterPoint Energy’s non-employee directors. The Governance Committee evaluates on an annual basis the non-employee director compensation program with a view to approximate CenterPoint Energy’s peer group median and align non-employee director compensation with our shareholders’ interests. This evaluation considers the significant time expended and background, experience and skill levels required to fulfill the duties of a non-employee director. The Governance Committee’s independent compensation consultant annually benchmarks and evaluates the competitiveness of CenterPoint Energy’s non-employee directors’ compensation program, including a comparison of the compensation components to that of peer companies. Based on the Governance Committee’s recommendations, the Board of Directors then determines the final compensation for all non-employee directors each year.

Directors receive a cash retainer and are eligible to receive annual grants of our common stock under the CenterPoint Energy, Inc. Stock Plan for Outside Directors, as amended. Directors no longer receive meeting fees, and participation in a plan providing split-dollar life insurance coverage has been discontinued for directors commencing service after 2000.

Stock ownership guidelines for non-employee directors were originally adopted in February 2011. Under the current guidelines, each non-employee director is required to own shares of CenterPoint Energy common stock with a value equal to at least five times the director’s regular annual cash retainer. New directors are required to attain the specified level of ownership within five years of joining the Board.

Item 1: Election of Directors (continued)

Retainer Fees

Retainers are paid to our non-employee directors on a quarterly basis in arrears. Our non-employee directors receive an annual retainer of $110,000. The Chairs of the Audit, Compensation, Finance and Governance Committees each receive a supplemental annual retainer for service as committee chair. In addition to the annual retainer and standing committee chair supplemental retainers, non-employee directors serving on the Business Review and Evaluation Committee and the Chief Executive Officer Search Committee also receive supplemental retainers for their service on such committees. Our current non-employee annual and supplemental retainer fees are as follows:

Fees earned or paid in 2020 are set forth in the Fees Earned or Paid in Cash column of the Director Compensation Table.

Stock Plan for Outside Directors

Each non-employee director serving as of May 1, 2020 was granted an annual stock award under our Stock Plan for Outside Directors in 2020. The cash value of these awards, as of the grant date, is set annually by the Board. The number of shares awarded is then determined by dividing the cash value by the fair market value of the common stock on the grant date. In 2020, for each non-employee director serving as of May 1, 2020, the Board determined a cash value for the stock award, as of the grant date, of $150,000, resulting in a stock award to each non-employee director of 9,113 shares of common stock. The annual stock awards granted under our Stock Plan for Outside Directors are immediately fully vested upon grant.

In addition to the annual grant, our Stock Plan for Outside Directors provides that a non-employee director may receive a one-time, initial grant of shares of common stock upon first commencing service as a director, based on a cash value, as of the date of the grant, set by the Board. Any such awards granted are immediately fully vested. The Board made one-time initial grants under this provision of the Stock Plan for Outside Directors to Messrs. Lesar* and Smitherman on June 4, 2020 with a cash value for such award, as of the grant date, of $150,000, resulting in a stock award to each of Messrs. Lesar and Smitherman of 8,310 shares of common stock, and to Mr. Cummings on July 1, 2020 with a cash value for such award, as of the grant date, of $125,000, resulting in a stock award to Mr. Cummings of 6,487 shares of common stock.

Deferred Compensation Plan

We maintain a deferred compensation plan that permits directors to elect each year to defer all or part of their annual retainer and supplemental annual retainer for committee chairmanship. Interest accrues on deferrals at a

Item 1: Election of Directors (continued)

rate, adjusted annually, equal to the average yield during the year of the Moody’s Long-Term Corporate Bond Index plus two percent. Directors participating in this plan may elect at the time of deferral to receive distributions of their deferred compensation and interest in three ways:

The deferred compensation plan is a nonqualified, unfunded plan, and the directors are general, unsecured creditors of CenterPoint Energy with respect to their plan benefits. No fund or other assets of CenterPoint Energy have been set aside or segregated to pay benefits under the plan. Refer to “Rabbi Trust” under “Executive Compensation Tables—Potential Payments upon Change in Control or Termination” for funding of the deferred compensation plan upon a change in control.

The amounts deferred by directors in 2020 are described in footnote (1) to the Director Compensation Table. The above market earnings are reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Director Compensation Table.

Director Compensation Table

The table below and the narrative in the footnotes provide compensation amounts for our non-employee directors for 2020, as well as additional material information in connection with such amounts. For summary information on the provision of the plans and programs, refer to the “Compensation of Directors” discussion immediately preceding this table. For further information regarding the compensation received by Messrs. Lesar and Somerhalder for their respective service as non-employee directors during a portion of 2020, refer to “Compensation Discussion and Analysis—Executive Compensation Tables—Summary Compensation Table for Fiscal Year 2020.”

Item 1: Election of Directors (continued)

STOCK OWNERSHIP

The following table shows stock ownership of known beneficial owners of more than 5% of CenterPoint Energy’s common stock, each director or nominee for director, the Interim Chief Executive Officer, the Chief Financial Officer, the other executive officers for whom we are providing detailed compensation information under “Executive Compensation Tables” and our executive officers and directors as a group. Information for the executive officers and directors is given as of March 5, 2021 except as otherwise indicated. The directors and officers, individually and as a group, beneficially own less than 1% of CenterPoint Energy’s outstanding common stock. Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (Exchange Act) and, except as otherwise indicated, the respective holders have sole voting and investment powers over such shares.

Stock Ownership (continued)

COMPENSATION DISCUSSION AND ANALYSIS

The following compensation discussion and analysis as well as the information provided under the “Executive Compensation Tables” section contains information regarding measures applicable to performance-based compensation and targets and other achievement levels associated with these measures. CenterPoint Energy cautions investors not to regard this information, to the extent it may relate to future periods or dates, as forecasts, projections or other guidance. The reasons for this caution include the following: The information regarding performance objectives and associated achievement levels was formulated as of earlier dates and does not take into account subsequent developments. The objectives may include adjustments from, or otherwise may not be comparable to, financial and operating measures that are publicly disclosed and may be considered of significance to investors. Some achievement levels, such as those relating to incentives for exceptional performance, may be based on assumptions that differ from actual results.

The Compensation Committee of the Board of Directors has developed a compensation program that aligns executive compensation with short-term and long-term performance against financial, operational and strategic goals that are key to delivering long-term value for our shareholders. This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation program, including the objectives and elements of compensation, as well as recommendations and determinations made by the Compensation Committee regarding the compensation of our named executive officers.

Executive Summary

Our named executive officers for 2020 are listed below:

David J. Lesar		Jason P. Wells		Milton Carroll		Kristie L. Colvin		Scott E. Doyle		Gregory E. Knight
President, Chief Executive Officer & Director		Executive Vice President & Chief Financial Officer		Executive Chairman		Senior Vice President & Chief Accounting Officer and Former Interim Executive Vice President & Chief Financial Officer		Executive Vice President, Natural Gas		Executive Vice President, Customer Transformation & Business Services

Compensation Discussion and Analysis (continued)

Our named executive officers for 2020 include the following individuals who departed the Company during 2020:

In this proxy statement, we refer to David J. Lesar, Jason P. Wells, Kristie L. Colvin, Scott E. Doyle and Gregory E. Knight and, for periods prior to their respective departures, Scott M. Prochazka (February 19, 2020), Xia Liu (April 1, 2020), John W. Somerhalder II (June 30, 2020) and Joseph J. Vortherms (October 2, 2020) as our “senior executive officers.” We also describe and discuss the compensation of our Executive Chairman, Milton Carroll. We refer to our Executive Chairman and our senior executive officers collectively as our “named executive officers” in this proxy statement.

Shareholder Engagement and Say-on-Pay Vote

Feedback from our shareholders is a critical part of our Company’s and our Compensation Committee’s approach to designing our executive compensation program. Each year, we engage in shareholder outreach through various engagement channels including direct meetings, analyst conferences and road shows, among others, and proactively solicit feedback. We also reach out to the proxy governance teams of certain of our large institutional investors to solicit feedback on a range of topics, including, among other topics, our executive compensation program, including short-term and long-term incentive plan design and executive succession planning, ESG matters, including our corporate governance practices such as board composition and refreshment, environmental and sustainability matters, such as climate change and our carbon emissions reduction targets, human capital management, including our diversity and inclusion initiatives and COVID-19 response, and proxy statement disclosure.

At the 2020 Annual Meeting of Shareholders, we received 57% support on our annual advisory vote on executive compensation, down from 93.5% support at our 2019 Annual Meeting. Our executive compensation programs have historically received strong shareholder support (averaging approximately 93% over 2017, 2018 and 2019).

In response to the outcome of the 2020 advisory vote on executive compensation, we reached out to our top 28 shareholders, representing approximately 64% of our outstanding shares, to request meetings to discuss any issues or concerns they had, particularly with respect to our executive compensation program. Shareholders representing 42% of our outstanding shares agreed to engage with us. For those that did not respond or agree to engage with us, we reached out to them again to request meetings.

In November and December of 2020, key members of our executive leadership team representing Human Resources, Investor Relations, Corporate Governance and Environmental, along with our Compensation Committee Chair in certain instances, participated in our shareholder engagement. We provided an open forum to each shareholder to discuss and comment on any aspects of the Company’s executive compensation program or ESG matters. Overall, we received generally positive and constructive feedback from the shareholders who engaged with us regarding the Company’s executive compensation program and our ESG practices. The Company, after this engagement with these shareholders, agreed to keep in contact with them, as well as the other shareholders who chose not to engage with the Company, to continue to receive any such feedback they may have on the Company’s executive compensation program and our ESG practices.

Compensation Discussion and Analysis (continued)

These meetings with our shareholders provided the Compensation Committee and the Board with valuable insights into our shareholders’ perspectives on our compensation program and potential improvements to the program, as described further below. Following the shareholder outreach, with input from its independent compensation consultant and management, the Compensation Committee conducted a comprehensive review of our programs, including performance metrics and targets, with particular emphasis on our short-term and long-term incentive plans, as discussed below.

Compensation Discussion and Analysis (continued)

The table below summarizes the executive compensation topics our shareholders asked us to consider and our response.

Compensation Discussion and Analysis (continued)

In addition to engaging with our shareholders, we also engaged with representatives from Institutional Shareholder Services and Glass Lewis to gain clarity on matters they highlighted in their reports to investors, including how they evaluated our 2020 proxy disclosure and how they intend to evaluate our 2021 proxy disclosure.

2020 Business Strategy Highlights

We are committed to delivering shareholder value, and in 2020, the Company’s management advanced our strategy of delivering long-term value against the backdrop of an unusual and challenging year. Although we experienced headwinds, including the COVID-19 pandemic and a record hurricane season, our employees maintained business continuity and provided reliable service to our millions of customers.

2020 was a transformational year for our leadership team, as our Board of Directors made changes to the leadership team to position the Company for long-term success. Concurrent with the Company’s leadership transition discussed further below, we undertook a strategic business review and evaluation process (the “BREC review”) focused on maximizing the value from our various businesses, assets and ownership interests. Following the BREC review, we held an Investor Day to introduce to our shareholders our Company’s new long-term growth strategy that we believe will position us as a premium utility company. Our long-term value proposition focuses on (i) growing our regulated utility businesses through an accelerated capital investment plan by concentrating on safety, optimizing service to our customers and emphasizing cleaner energy generation and delivery, (ii) delivering operational excellence while reducing our operations and maintenance expenses and (iii) accessing constructive regulatory recovery, among other key components. We delivered strong operational and financial performance in 2020 in service of that strategy. We believe that our business strategy and long-term value proposition position us to be a new CenterPoint Energy.

2020 Executive Compensation Highlights

Our 2020 named executive officer compensation reflects the Company’s significant financial, operational and strategic successes in a challenging year. Our Compensation Committee considered our named executive officers’ leadership of the Company’s business and operations during the COVID-19 pandemic, in an active hurricane season and with a significant leadership transition and recognized the Company’s strong performance with its compensation decisions. We believe our strong performance is not yet reflected in our stock price and shareholder returns, as reflected in our performance share unit award results addressed below; however, we remain committed to delivering on a strategy that will create value for our customers and investors. The Company did not make any adjustments to its performance metrics under the short-term and long-term incentive plans due to COVID-19.

Compensation Discussion and Analysis (continued)

Compensation actions associated with our 2020 leadership transition activities are described below.

Transition to New Leadership

As noted above, our Board of Directors and new President and Chief Executive Officer, David Lesar, took steps to strengthen our management team in 2020. A high-performing team enhances the value we deliver to stakeholders. Further, our team is now more diverse and brings a significant amount of utility experience. In connection with, and in support of, these transitions, the Compensation Committee approved certain compensation arrangements as described below.

President and Chief Executive Officer, David Lesar

On July 1, 2020, Mr. Lesar became the new President and Chief Executive Officer of CenterPoint Energy. Mr. Lesar was previously the Chairman of the Board and Chief Executive Officer of Halliburton Company from 2000 to 2017. In recognition of his significant experience leading a large public company, the Compensation Committee approved a competitive compensation package for Mr. Lesar. To induce Mr. Lesar to join the organization and create immediate alignment with shareholders, he received a sign-on restricted stock unit grant valued at $1,000,000 as of the grant date. This award will vest ratably upon his continued employment on the first, second and third anniversaries of the grant date. Additionally, the Company provided Mr. Lesar with relocation benefits, including the purchase of his home, to facilitate an expedited move to Houston and allow Mr. Lesar to quickly engage in his Chief Executive Officer duties and responsibilities. The Company’s purchase of Mr. Lesar’s home, as opposed to Mr. Lesar executing the sale individually, also helped to minimize his exposure to COVID-19, which exposure would have been more likely as a result of multiple home showings while he continued to reside in the home.

Compensation Discussion and Analysis (continued)

Mr. Lesar’s annual pay package was designed so that a significant portion of his compensation is at-risk and structured to incentivize long-term shareholder value creation, with 87% of his compensation delivered as performance or stock-based compensation. The details of Mr. Lesar’s annual pay package are described as part of our 2020 Executive Compensation Program disclosure below.

Executive Vice President and Chief Financial Officer, Jason Wells

On September 28, 2020, Jason Wells was appointed as the new Executive Vice President and Chief Financial Officer of CenterPoint Energy. Mr. Wells has extensive utility-focused financial leadership experience and most recently held the position of Executive Vice President and Chief Financial Officer of PG&E Corporation. In recognition of his leadership experience, the Compensation Committee approved a competitive compensation package and a sign-on equity incentive award comprised of restricted stock units valued at $1,000,000 as of the grant date, half of which will vest upon his continued employment through the first anniversary of the grant date and the remaining half of which will vest upon his continued employment through the second anniversary of the grant date. Additionally, the Company provided Mr. Wells with relocation benefits, including the purchase of his home, to facilitate an expedited move to Houston and allow Mr. Wells to quickly engage in his Chief Financial Officer duties and responsibilities. The Company’s purchase of Mr. Wells’ home, rather than Mr. Wells executing the sale himself, also helped to minimize his exposure to COVID-19, which exposure would have been more likely as a result of multiple home showings while he continued to reside in the home. The details of Mr. Wells’ annual pay package are described as part of our 2020 Executive Compensation Program disclosure below.

Executive Vice President, Customer Transformation and Business Services, Gregory Knight

Mr. Knight was appointed as Executive Vice President, Customer Transformation and Business Services, effective August 17, 2020. Mr. Knight is a recognized leader in utility customer operations, focusing on technology and innovation to enhance the customer experience. In recognition of his leadership experience, the Compensation Committee approved for Mr. Knight a sign-on cash bonus of $400,000 and a sign-on equity incentive award consisting of restricted stock units valued at $300,000 as of the grant date, which will vest ratably upon his continued employment on the first, second and third anniversaries of the grant date. Additionally, the Company provided Mr. Knight with relocation benefits to facilitate an expedited move to Houston and allow Mr. Knight to quickly engage in his duties and responsibilities. The details of Mr. Knight’s annual pay package are described as part of our 2020 Executive Compensation Program disclosure below.

Compensation Discussion and Analysis (continued)

Executive Chairman of the Board, Milton Carroll

As part of the strategic shift and changes in the Company’s executive leadership, the Board determined that it was in the best interests of shareholders for Mr. Carroll, our Executive Chairman, to have increased responsibilities. The Board tasked Mr. Carroll to help ensure business continuity through each of the Company’s transitions, including identifying and selecting a new Chief Executive Officer to support the development of, and lead, the Company’s new strategy. Specifically, his increased role included significant contributions and time commitment involved with the Chief Executive Officer transition, including transitioning the prior Chief Executive Officer out, identifying and selecting the next Chief Executive Officer and assisting with the transition from the prior Chief Executive Officer to the interim Chief Executive Officer and finally to the new Chief Executive Officer. His efforts helped provide for business continuity through each of the Company’s leadership transitions. Mr. Carroll’s institutional knowledge of the Company’s business, operations and culture was particularly relevant in supporting, advising and consulting with the interim Chief Executive Officer and new Chief Executive Officer. In recognition of the above, on February 26, 2020, the Compensation Committee approved the following one-time additional compensation awards for Mr. Carroll:

Senior Vice President and Chief Accounting Officer and Former Interim Executive Vice President and Chief Financial Officer, Kristie Colvin

Ms. Colvin was appointed Interim Executive Vice President and Chief Financial Officer effective April 2, 2020, in addition to her role as the Company’s Chief Accounting Officer. On April 6, 2020, for Ms. Colvin’s service as Interim Executive Vice President and Chief Financial Officer, the Compensation Committee approved the following in respect of her additional responsibilities:

Upon her appointment as Interim Executive Vice President and Chief Financial Officer, in addition to her February 19, 2020 awards, Ms. Colvin also received performance share unit and restricted stock unit awards to reflect changes made to her base salary and long-term incentive target award level. If Ms. Colvin is involuntarily separated from the Company without cause, these awards will fully vest.

Concurrent with Mr. Wells’ appointment, Ms. Colvin stepped down from the role of Interim Executive Vice President and Chief Financial Officer. Ms. Colvin received two of the quarterly cash payments and grants during the interim period.

Compensation Discussion and Analysis (continued)

Please refer to “—2020 Executive Compensation Program—Executive Officer Departures” for further information.

Executive Compensation Program Overview

Our Compensation Objectives

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

Compensation Discussion and Analysis (continued)

Compensation Program Key Features and Best Practices

The following are key features of our executive compensation program, which we believe are governance best practices and align the interests of management with those of our shareholders.

Design of Executive Compensation Program

Key Compensation Components and Purpose

We strive to provide compensation that is competitive, both in total and in individual components, with the companies we believe are our peers and likely competitors for executive talent.

We also motivate our executives to achieve individual and business performance objectives by varying their compensation in accordance with our overall success. Actual compensation in a given year will vary based on our performance, and to a lesser extent, on qualitative appraisals of individual performance. We expect our senior executive officers to have a higher percentage of their total compensation at risk to align each of our senior executive officers with the short-term and long-term performance objectives of CenterPoint Energy and with the interests of our shareholders.

Compensation Discussion and Analysis (continued)

The key components of our 2020 compensation programs, including certain changes beginning in 2021, and their purpose in advancing our strategic objectives are outlined below.

Pay For Performance

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

A significant portion of our named executive officers’ total direct compensation, which includes base salary in addition to the short-term and long-term incentive components, as applicable, is conditioned upon achieving results that are key to our long-term success and increasing shareholder value.

Compensation Discussion and Analysis (continued)

The following graphics reflect the components of the target total direct compensation opportunities provided to our named executive officers.

TARGET COMPENSATION MIX AS OF DECEMBER 31, 2020

(consisting of base salary, short-term incentives and long-term incentives)

*The graphic represents the average size of each component as a percentage of each named executive officer’s (other than the Chief Executive Officer’s and former senior executive officers’) target total direct compensation opportunities (approved by the Compensation Committee in 2020).

2020 Executive Compensation Program

2020 Target Compensation Opportunities for Named Executive Officers

Prior to our shareholder engagement effort, the overall objectives and structure of our executive compensation program for our named executive officers remained largely unchanged in 2020 as compared to 2019. In February 2020, or, for our new executive officers, prior to their employment, the Compensation Committee reviewed the base salary and short-term and long-term incentive targets, as applicable, for each of our named executive officers and certain of our named executive officers serving in interim positions in 2020, and determined their respective base salaries and short-term and long-term incentive targets, as applicable, to provide each officer a competitive total direct compensation opportunity as shown below.

Compensation Discussion and Analysis (continued)

Executive Officer Departures

Departure of Former President and Chief Executive Officer, Scott Prochazka

As part of our leadership transition, our former President and Chief Executive Officer Scott Prochazka departed the organization in February 2020. In connection with his departure, the Company entered into a separation and release agreement with Mr. Prochazka and approved a one-time payment in exchange for a release of claims and protective covenants such as a non-solicitation agreement. This separation and release agreement and the associated one-time payment were enacted to support business continuity and a smooth transition following his departure.

Upon executing the release, Mr. Prochazka received the following:

Additionally, Mr. Prochazka was eligible for 18 months of COBRA at active employee rates, and, until December 31, 2020, he received financial planning services, which are available to the Company’s senior executive officers.

Former Interim President and Chief Executive Officer, John Somerhalder II

During the interim period following Mr. Prochazka’s departure and prior to Mr. Lesar’s hire date, John Somerhalder II filled the role of Interim President and Chief Executive Officer. As a retired utility chief executive officer, Mr. Somerhalder provided leadership at a crucial time for the Company—during the initial height of the COVID-19 pandemic and unprecedented market reaction thereto—and his leadership supported continuous operations of the Company’s essential electric and natural gas distribution services. In connection with his role in this interim capacity, Mr. Somerhalder received the following compensation intended to reflect the uncertain and short timeframe of his service to the Company:

Departure of Former Executive Vice President and Chief Financial Officer, Xia Liu

Our former Executive Vice President and Chief Financial Officer, Ms. Liu, resigned from the organization in April 2020. Ms. Liu did not receive any additional compensation associated with her departure.

Departure of Former Senior Vice President, Energy Services, Joseph Vortherms

On October 2, 2020, Mr. Vortherms departed from the Company due to the elimination of his role in connection with the divestitures of certain of the Company’s competitive energy businesses, including its competitive natural gas

Compensation Discussion and Analysis (continued)

marketing and infrastructure services businesses, as part of the Company’s strategic transition to focus on its regulated utility businesses. The Compensation Committee approved a severance payment to Mr. Vortherms of $925,000 and elected to vest Mr. Vortherms’ outstanding equity awards under CenterPoint Energy’s long-term incentive plan pursuant to certain vesting provisions under the applicable equity award agreements such that his outstanding awards fully vested upon his departure, subject, in the case of performance share unit awards, to achievement of the relevant performance metrics in accordance with the terms of the award agreements. Please refer to “Executive Compensation Tables—Equity Incentive Plan Awards – Additional Information—Additional Information Regarding Our Equity Incentive Plan Awards” for further discussion regarding application of the termination provisions under the Company’s long-term incentive plan. Additionally, Mr. Vortherms is eligible for 18 months of COBRA at active employee rates, and, until December 31, 2020, he received financial planning services, which are available to the Company’s senior executive officers.

Base Salary

Base salary is the foundation of total compensation. Base salary recognizes the job being performed and the value of that job in the competitive market. Base salary must be sufficient to attract and retain the executive talent necessary for our continued success and provides an element of compensation that is not at risk to avoid fluctuations in compensation that could distract our executives from the performance of their responsibilities. The Compensation Committee generally seeks to position the base salary for our most senior executives near the 50th percentile of base salaries in the peer group and published compensation surveys.

Adjustments to base salary primarily reflect either changes or responses to changes in market data or increased experience and individual contribution of the employee. The typical date for making these adjustments is April 1 of each year; however, adjustments may occur at other times during the year to recognize new responsibilities or new data regarding the market value of the job being performed.

In February 2020, the Compensation Committee reviewed the base salary for each of our named executive officers, with the exception of Messrs. Lesar, Knight and Wells, who were appointed to their positions in July, August and September 2020, respectively, and certain of our named executive officers serving in interim positions in 2020, and determined their respective base salaries in recognition of the scope of their respective roles and to align their base salaries with market benchmarks for our peer group.

Compensation Discussion and Analysis (continued)

Short-Term Incentive Plan

Our short-term incentive plan provides an annual cash award that is designed to link each employee’s annual compensation to the achievement of annual performance objectives for CenterPoint Energy as well as to recognize the employee’s performance during the year. The target award for each employee is expressed as a percentage of base salary earned during the year.

The Compensation Committee generally determines each senior executive officer’s short-term incentive target based on the competitive market data developed by its compensation consultant and recommendations from the Chief Executive Officer for officers other than himself. In light of the Company’s strong 2020 performance, in February 2021, the Compensation Committee recognized Mr. Lesar’s performance and key contributions with a short-term incentive plan payment for 2020 based on his annualized full year salary. Historically, our Executive Chairman was not eligible to participate in our short-term incentive plan. Due to Mr. Carroll’s significant contributions to the Company during the aforementioned leadership transitions in 2020, his role in the development of the Company’s strategic initiatives and new strategy, as well as his increased responsibilities and involvement with management and the operations of the Company to drive both short-term and long-term Company performance, in February 2021, the Compensation Committee determined that Mr. Carroll will be eligible to participate in the short-term incentive plan beginning with the 2021 plan year, with a short-term incentive compensation target of 75% of base salary. In recognition of Mr. Carroll’s significant contributions and performance throughout 2020 that, in part, played a key role in the Company’s 2020 performance, in February 2021, the Compensation Committee also approved a cash bonus to Mr. Carroll of $881,475, payable in 2021, which is the amount he would have received under the short-term incentive plan had he been eligible to participate in 2020.

Each year, our Compensation Committee identifies incentive plan metrics that align with our strategy and with the interests of, and our commitments to, our shareholders. The Compensation Committee establishes and approves the specific performance objectives under the short-term incentive plan based on financial and operational factors determined to be critical to achieving our desired business plans and designed to reflect goals and objectives to be accomplished over a 12-month measurement period. After the end of the year, the Compensation Committee compares the actual results to the pre-established performance objectives and certifies the extent to which the objectives are achieved under the plan.

The entirety of each individual award is subject to the Compensation Committee’s discretion, consistent with the Company’s philosophy to pay for performance. In determining whether to exercise its discretion, the Compensation Committee may assess an individual executive’s contribution to the achievement of the performance objectives and any special circumstances and may also consider the input of our Chief Executive Officer on the amount to be awarded to each of the other senior executive officers.

Compensation Discussion and Analysis (continued)

The short-term incentive plan metrics for the 2020 performance year, along with the description of each metric and its critical linkage to our strategy for value creation, are provided in the table below.

* Adjustments are detailed as part of the “Executive Compensation Tables – Non-Equity Incentive Plan Awards” disclosure.

Establishing Performance Measures and Target Ranges

The Compensation Committee establishes annual performance measures that align with our business strategy and contribute to our long-term shareholder value proposition. The Compensation Committee establishes performance measures and the scaling of the levels necessary to achieve threshold, target and maximum performance, and, for certain financial metrics in 2020, exceptional performance, based on strategic priorities for the organization and an assessment of expected business performance during the measurement period. Generally, the target level for financial metrics is based on our 2020 business plan as approved by the Board of Directors. For the Customer Satisfaction and Safety composites, threshold, target and maximum goals are determined with consideration to historical performance, industry standards and the incremental performance we would expect to see as part of our approach to continuous improvement.

Compensation Discussion and Analysis (continued)

2020 Short-Term Incentive Plan Results

The table below illustrates CenterPoint Energy’s 2020 performance against the pre-established short-term incentive plan measures. The Compensation Committee considered the formulaic results and, in light of the Company’s strong performance against the backdrop of a challenging year, determined not to apply discretion to adjust the formulaic outcome. The overall payout under the short-term incentive plan for our named executive officers was calculated as follows: