Notice of 2014 Annual Meeting
and
Joint Proxy Statement

The EIX and SCE Boards of Directors are soliciting proxies from you for use at the Annual Meeting, or at any adjournment or postponement of the meeting. Proxies allow designated individuals to vote on your behalf at the Annual Meeting. The proxy materials are being mailed or made available to you via the Internet beginning on March 14, 2014.

The mailing address of the Company’s principal executive offices is 2244 Walnut Grove Avenue, Rosemead, California 91770.

Holding shares as a “registered shareholder” or “of record” means your shares are registered in your own name on the Company’s records. Shares held in the Dividend Reinvestment and Direct Stock Purchase Plan account are included.

Holding shares in “street name” means your shares are held in a brokerage account or through a trustee, custodian or other third party (referred to as a nominee), and you are considered the beneficial owner of those shares. Your name does not appear on the Company’s records as a shareholder.

“401(k) Plan” is the employee benefit plan known as the Edison 401(k) Savings Plan through which participants may hold interests in EIX shares through the EIX Stock Fund.

“401(k) Plan shareholders” are participants in the 401(k) Plan who hold interests in EIX shares through the EIX Stock Fund.

“Annual Meeting” means the EIX and SCE annual meetings of shareholders, which are held jointly.

“Annual Report” means the EIX and SCE 2013 combined annual report on Form 10-K, which is prepared and filed with the SEC jointly.

“Board” means both the EIX and SCE Boards of Directors, unless otherwise indicated.

“Committee” means the applicable Board committee of both EIX and SCE, unless otherwise indicated.

“Company” means both EIX and SCE, unless otherwise indicated.

“EIX” is Edison International.

“EMG” is Edison Mission Group Inc., a wholly-owned subsidiary of EIX, and holding company of Edison Mission Energy (“EME”). EME is in bankruptcy and is deconsolidated from EIX’s financial results.

“ERISA” is the Employee Retirement Income Security Act of 1974.

“Notice of Internet Availability” or “Notice” is the notice regarding the availability on the Internet of the Company’s proxy materials, which was mailed to most shareholders in lieu of printed copies of the proxy materials, as permitted under Securities and Exchange Commission rules.

“Proxy card” means either a proxy card, which you may receive if you are a registered shareholder, or a voting instruction form, which you may receive if you hold shares in street name or are a 401(k) Plan shareholder.

“Proxy Statement” means the EIX and SCE proxy statements, which are prepared and filed with the SEC jointly.

“SCE” is Southern California Edison Company.

Proxy Summary

Q: What is included in the proxy materials?

A: The proxy materials include the Notice of Annual Meeting and Proxy Statement, the Annual Report, the Proxy card, and the Notice of Internet Availability.

Q: Why did the Company mail a Notice of Internet Availability instead of a printed copy of the materials?

A: Making the proxy materials available to shareholders via the Internet saves us the cost of printing and mailing documents and will reduce the impact of the Annual Meeting on the environment.

If you received only a Notice of Internet Availability, you will not receive a printed copy of the proxy materials unless you request it. The Notice includes instructions on how to access and review the proxy materials, submit your proxy via the Internet, and request a printed copy of proxy materials by mail.

Q: Why did some shareholders receive printed or email copies of the proxy materials?

A: We are distributing printed copies of the proxy materials to shareholders who have previously requested printed copies. We are providing shareholders who have previously requested electronic delivery of proxy materials with an email containing a link to the website where the materials are available via the Internet.

Q: Who can vote?

A: All owners of voting stock at the close of business on February 28, 2014 (the record date) are entitled to vote.

On each Item of EIX business, holders of EIX Common Stock are entitled to one vote per share. On each Item of SCE business, holders of SCE Cumulative Preferred Stock are entitled to six votes per share and EIX, as the holder of SCE Common Stock, is entitled to one vote per share. All shares of SCE Common and Cumulative Preferred Stock vote together as one class.

Q: Who can attend the Annual Meeting?

A: All shareholders on the record date, or their duly appointed proxies, may attend the meeting. All shareholders will be required to pass through a security inspection area (where all packages will be subject to search) and check in at the registration desk at the meeting. The registration desk will open at 8:00 a.m. and meeting room doors will open at 8:30 a.m., Pacific Time. For the privacy of other attendees and to avoid distraction, shareholders will not be permitted to use cameras or recording devices at the meeting.

If you are a registered shareholder or a 401(k) Plan shareholder, we will be able to verify your share ownership from the share register with proper identification. No admission pass is required. To be admitted as a proxy for a registered shareholder, you must provide a written authorization from the registered shareholder.

If your shares are held in street name, you will need to bring proper identification and a letter or an account statement from your broker or other nominee reflecting your stock ownership as of the record date. To be admitted as a proxy for a broker, you must provide a written authorization from the broker together with a letter or account statement reflecting the broker’s ownership as of the record date. If a nominee holds the shares, you must provide a written authorization from the nominee to the broker that is assignable, a written authorization from the broker, and a letter or account statement reflecting the nominee’s ownership as of the record date.

Individual shareholders may bring one guest to the Annual Meeting. A shareholder that is a corporation, partnership, association or other entity is limited to three authorized representatives at the Annual Meeting.

Q: How do I vote?

A: Your vote is important. You can save us the expense of additional solicitations by voting promptly. Please follow the instructions described below:

		By Internet – Shareholders who received a Notice of Internet Availability may vote via the Internet by following the instructions on the Notice. Shareholders who received a proxy card by mail may vote via the Internet by following the instructions on the proxy card. When voting via the Internet, all shareholders must have available the control number included on their Notice of Internet Availability or proxy card. Under California law, you may transmit a proxy via the Internet.
		By Telephone – Registered or 401(k) Plan shareholders may vote by telephone by calling 1-866-883-3382 and following the recorded instructions. Most shareholders who hold their shares in street name may vote by phone by calling the number provided by their broker. When voting by telephone, all shareholders must have available the control number included on their Notice of Internet Availability or proxy card.
		By Mail – Shareholders who received a printed copy of these proxy materials may vote by mail by completing, signing, dating and returning their proxy card as indicated.
		In Person – Registered shareholders may vote in person by attending the Annual Meeting and completing a ballot distributed at the meeting. Shareholders who hold their shares in street name may vote in person by attending the Annual Meeting only if they have requested and received a legal proxy from their broker or other nominee, and

deliver the proxy to the inspector of election before or at the meeting. 401(k) Plan shareholders may not cast votes in person at the Annual Meeting.

Q: What is the deadline to vote and how do I change my vote?

A: If you are a registered shareholder, the inspector of election will accept your proxy by telephone or via the Internet until 9:00 p.m., Pacific Time, on April 23, 2014, and by mail if it is received by the inspector of election before the polls close at the Annual Meeting. Registered shareholders may change their vote prior to the deadline by writing to the Corporate Secretary at the address above (so that it is received prior to the deadline), voting again by mail, telephone or the Internet, or voting in person at the Annual Meeting.

If you hold shares in street name, most brokers will accept your proxy by telephone or the Internet until 9:00 p.m., Pacific Time, on April 23, 2014, and by mail if it is received by your broker’s designated agent by 9:00 a.m., Pacific Time, on April 24, 2014. Contact your broker or other nominee before the Annual Meeting to determine the actual deadline and whether and how you can change your vote.

If you are a 401(k) Plan shareholder, your proxy must be received by 9:00 p.m., Pacific Time, on April 22, 2014 for the 401(k) Plan trustee to vote your shares. 401(k) Plan shareholders may change their vote at any time prior to this deadline by voting again. The last vote received within this timeframe will be the vote that is counted.

Q: What does it mean if I get more than one Notice of Internet Availability or proxy card?

A: It indicates that your shares are held in more than one account, such as two brokerage accounts, you hold both registered and street name shares, or you hold shares in both EIX and SCE. You should use the specific control numbers provided on each Notice of Internet Availability or proxy card and vote each Notice or proxy card to ensure that all of your shares are voted.

Q: What shares are covered by the proxy card?

A: This depends on how you hold your shares, and whether you hold shares in EIX, SCE, or both EIX and SCE.

Registered and 401(k) Plan Shareholders – For EIX registered and 401(k) Plan shareholders, you will receive or have Internet access to a single proxy card that covers all shares of EIX Common Stock in your registered and 401(k) Plan accounts, including fractional shares held in the 401(k) Plan but excluding fractional shares held in the Dividend Reinvestment and Direct Stock Purchase Plan.

For SCE registered shareholders, you will receive or have Internet access to separate proxy cards for each series of preferred stock registered in your name.

If you hold registered shares in both EIX and SCE, you will receive or have Internet access to separate proxy cards for each Company.

Street Name Shareholders – If you hold shares of EIX and/or SCE in street name, you will receive or have Internet access to separate proxy cards from each broker or other nominee.

Q: What happens if I submit my proxy card but do not indicate my voting preference?

A: The proxies and 401(k) Plan trustee will vote “FOR” election of all nominees for director (Item 1), “FOR” ratification of the appointment of the independent registered public accounting firm (Item 2), “FOR” approval of executive compensation (Item 3),and “AGAINST” the shareholder proposal regarding an independent Board Chairman (Item 4, EIX only).

Q: What happens if I submit my proxy card but do not sign or date my card?

A: Those shares will be treated as unvoted shares on all matters and will not be considered as present and part of the quorum.

Q: What happens if I do not vote?

A: If you are a registered shareholder, your shares will not be voted.

If you hold your shares in street name, most brokers or other nominees will only have authority to vote your shares on ratification of the appointment of the independent registered public accounting firm (Item 2). With respect to each of the other Items, most brokers or other nominees will not have authority to vote your shares, and the shares will instead be treated as “broker non-votes.”

If you are a 401(k) Plan shareholder, the 401(k) Plan trustee will vote your shares in the same proportion to the 401(k) Plan shares voted by other 401(k) Plan shareholders, unless contrary to ERISA.

Q: How many votes do you need to hold the meeting?

A: A quorum is required for the Company to conduct business at the Annual Meeting. The presence at the Annual Meeting, in person or by proxy, of shareholders entitled to cast a majority of the votes that all shareholders are entitled to cast constitutes a quorum. All shares represented by a properly signed proxy will be considered as present and part of the quorum, even if you or your broker or other nominee doesn’t vote or abstains on any or all matters.

As of the record date, EIX had 325,811,206 shares of Common Stock outstanding, 325,799,496 of which are entitled to cast a total of 325,799,496 votes. Therefore, a quorum for EIX is 162,899,749 shares. SCE had

4,800,198 shares of Cumulative Preferred Stock outstanding and entitled to cast a total of 28,801,188 votes, and 434,888,104 shares of Common Stock outstanding and entitled to cast a total of 434,888,104 votes. Voting together as a class, the SCE shareholders have the right to cast a total of 463,689,292 votes. Therefore, a quorum for SCE is 231,844,647 shares.

Q: What vote is required to adopt each Item at the meeting?

A: A director nominee will be elected and a proposal will be approved if the following two votes are obtained:

• The affirmative vote of at least a majority of the votes cast on the director or proposal. Abstentions and broker non-votes are not treated as votes cast, and therefore will not affect this vote; and
   
• The affirmative vote of at least a majority of the votes required to constitute a quorum. Abstentions and broker non-votes are not treated as votes cast and therefore will have the effect of votes cast against the director or proposal for this vote.

Q: Who will count the votes?

A: Wells Fargo Bank, N.A., will tabulate the votes and is expected to act as the inspector of election. To protect the confidentiality of votes cast under the 401(k) Plan, 401(k) Plan shareholders’ voting instructions are given directly to Wells Fargo. Wells Fargo will tabulate those votes and provide aggregate voting results directly to the 401(k) Plan trustee. EIX will not have access to any of the 401(k) Plan shareholders’ voting instructions, and 401(k) Plan voting results are only reported to EIX in the aggregate.

Q: How much will this proxy solicitation cost?

A: We have retained AST Phoenix Advisors to assist us with the solicitation of proxies and will pay an aggregate fee of $20,000 (EIX $18,000 and SCE $2,000) plus expenses. This fee does not include the costs of printing and mailing the proxy materials. Some of the directors, officers and other employees of the Company also may solicit proxies personally, by mail, by telephone or by other electronic means for no additional compensation. We will also reimburse brokers and other nominees for their reasonable out-of-pocket and other actual expenses for forwarding proxy materials to beneficial owners and obtaining voting instructions.

Q: Whom may I call with questions about the meeting or voting?

A: You may call Wells Fargo at 1-800-347-8625 or visit their Internet website at www.shareowneronline.com.

Q: What happens if additional matters are presented at the Annual Meeting?

A: The Board is not aware of, and does not intend to present, any business to be acted upon at the Annual Meeting other than the Items described in this Proxy Statement. If you submit a proxy and any other matters properly come before the Annual Meeting, including matters incident to the conduct of the Annual Meeting, the persons named as proxy holders will have the discretionary authority to vote your shares in accordance with their best judgment. If any of the nominees for election to the Board become unavailable to stand for election as a director, the proxies will also have the authority to vote for substitute nominees chosen by the Board.

Q: What is the deadline to submit shareholder proposals or other business for the 2015 Annual Meeting?

A: To be considered for inclusion in the 2015 Proxy Statement, shareholder proposals for the Company’s 2015 Annual Meeting must be received by November 14, 2014.

Shareholders intending to bring any other business before an Annual Meeting, including director nominations, must give written notice to the Corporate Secretary of the business to be presented. The notice must be received at our office within the periods, and with the information and documents, specified in the Bylaws.

Assuming that the 2015 Annual Meeting is held on April 23, 2015, as currently specified by the Bylaws, the period for the receipt by the Corporate Secretary of written notice of other business to be brought by shareholders before the 2015 Annual Meeting, including director nominations, will begin on September 15, 2014 and end on November 14, 2014.

Twelve directors are nominated for election to the EIX Board and 13 directors are nominated for election to the SCE Board, each to hold office until the next Annual Meeting. The director nominees of EIX and SCE are the same, except that Mr. Litzinger is a nominee for the SCE Board only.

Director Córdova has been nominated by President Obama to be the director of the National Science Foundation and will be required to resign from the Board if she is confirmed. If Dr. Córdova resigns prior to the Annual Meeting, she will no longer be a nominee for election to the Board and the number of directors nominated for election to the EIX and SCE Boards will be reduced immediately upon her resignation to 11 and 12, respectively.

A current director, Ronald L. Olson, was not nominated for re-election because he reached the mandatory retirement age of 72 before the date of nomination by the Board (February 27, 2014).

A biography of each nominee describing his or her age as of the date of this Proxy Statement, current Board committee service, business experience during the past five years, and other relevant business experience is presented below. The biography includes the specific experience, qualifications, attributes, and skills that led the Board to conclude that the nominee should serve as a director. While each nominee’s entire range of experience and skills is considered important, particular experience that contributes to the diversity and effectiveness of the Board is identified below. An overview of certain information considered by our Nominating/Corporate Governance Committee when nominating our directors for re-election is presented in the Proxy Summary above.

		Jagjeet S. Bindra
		Age 66
		Director since 2010
		Committees: Audit; Finance,
		Operations & Safety Oversight

Mr. Bindra served as president of Chevron Global Manufacturing, responsible for Chevron Corporation’s worldwide refining operations, from 2004 until his retirement in 2009. During his 32-year career at Chevron, Mr. Bindra also served as managing director and chief executive officer of Caltex Australia Limited, president of Chevron Pipeline Co., and senior vice president, pipelines, of Chevron Overseas Petroleum, Inc. He is a director of LyondellBasell Industries N.V. and Transocean Ltd. Mr. Bindra is a graduate of the Indian Institute of Technology in Kanpur, India, and holds a Master of Science degree in Chemical Engineering from the University of Washington and an MBA degree from Saint Mary’s College of California.

Mr. Bindra brings to the Board global experience in a capital intensive industry in the energy sector, which is particularly relevant to the Company’s capital and infrastructure investment program. He has expertise in energy value chain and asset management, and in safety and operational risk management, which he brings to Board deliberations. Mr. Bindra’s experience as a director of other public companies also brings value to the Board.

		Vanessa C.L. Chang
		Age 61
		Director since 2007
		Committees: Audit (Chair);
		Compensation & Executive Personnel

Ms. Chang has been a director of EL & EL Investments, a private real estate investment business, since 1999. She previously served as chief executive officer and president of ResolveItNow.com, an online dispute resolution service, senior vice president of Secured Capital Corporation, a real estate investment bank, and a partner of the accounting firm KPMG Peat Marwick LLP. Ms. Chang is a director of Transocean Ltd. and a director or trustee of seven funds in the American Funds family, advised by Capital Research and Management Company. She is a graduate of the University of British Columbia and a Certified Public Accountant (inactive). Ms. Chang brings to the Board experience in accounting and financial reporting and oversight matters. This experience is valuable in her role as the Company’s Audit Committee Chair and financial expert.

Ms. Chang has spent most of her career in the Southern California area and brings knowledge of the community served by SCE. She also brings experience as a director of public, private, and non-profit organizations, securities regulation and corporate governance knowledge.

		France A. Córdova
		Age 66
		Director since 2004
		Committees: Audit; Nominating/
		Corporate Governance (Chair)

Dr. Córdova served as president of Purdue University from 2007 to July 2012 and continues to be on the faculty of Purdue in Physics and Astrophysics. Prior to that, she served as chancellor of the University of California, Riverside, vice chancellor for research and a professor of physics for the University of California, Santa Barbara, and NASA Chief Scientist. Dr. Córdova is a director of SAIC, Inc. She is a director or trustee of the Smithsonian Institution, the National Science Board, the Center for Advancement of Science in Space, and the Mayo Clinic. Dr. Córdova is a graduate of Stanford University and holds a Ph.D. in Physics from the California Institute of Technology.

Dr. Córdova brings to the Board experience as a leader of large organizations and expertise in science and technology matters. Her expertise in technology is particularly valuable in connection with technology developments affecting the utility industry and renewable energy. She also brings the perspective and insight of a director of other public and private companies and governmental and civic organizations.

		Theodore F. Craver, Jr.
		Age 62
		Director of EIX since 2007
		Director of SCE since 2008

Mr. Craver has been the Chairman of the Board, President, and Chief Executive Officer of EIX since 2008. He served as Chairman of the Board, President and Chief Executive Officer of EMG from 2005 to 2008, and, prior to that, Executive Vice President, Chief Financial Officer and Treasurer of EIX. Before joining the Company as Vice President and Treasurer in 1996, Mr. Craver served as executive vice president and corporate treasurer of First Interstate Bancorp and executive vice president and chief financial officer of First Interstate’s wholesale banking subsidiary. He is a director of Health Net, Inc. Mr. Craver is a graduate of the University of Southern California, where he also received his MBA degree.

Mr. Craver brings to the Board in-depth knowledge of the Company’s business, industry and strategy, experienced leadership and a finance background. He has had experience dealing with difficult challenges faced by the Company, including the California energy crisis. He is a leader in the electric utility industry, serving as vice chairman and chair-elect of the Edison Electric Institute, an association of U.S. shareholder-owned electric companies.

		Bradford M. Freeman
		Age 72
		Director since 2002
		Committees: Finance, Operations &
		Safety Oversight (Chair); Nominating/
		Corporate Governance

Mr. Freeman has been a founding partner of Freeman Spogli & Co., a private investment company, since 1983. Prior to that he served as managing director of the investment banking firm Dean Witter Reynolds, Inc. Mr. Freeman is a director of CBRE Group, Inc. He is a graduate of Stanford University and holds an MBA degree from Harvard Business School.

Mr. Freeman brings to the Board knowledge and experience in the capital markets and securities business, which is particularly valuable in the Company’s capital intensive business and in the context of its capital investment strategy. He also brings the perspective of managing an investment portfolio and an understanding of shareholder concerns. This experience is valuable in Mr. Freeman’s role as the Company’s Finance, Operations and Safety Oversight Committee Chair. As a result of his career in the Southern California area, he brings knowledge of the community served by SCE.

		Ronald L. Litzinger
		Age 54
		Director of SCE since 2011

Mr. Litzinger has been the President of SCE since 2011. He has held a wide range of executive positions at the EIX companies since joining SCE as an engineer in 1986. From 2008 to 2010, Mr. Litzinger served as President and Chief Executive Officer of EMG and EME, a subsidiary of EMG that filed for bankruptcy on December 17, 2012 and is deconsolidated from EIX’s financial results. He served as Senior Vice President of SCE responsible for transmission and distribution operations from 2005 to 2008, and, prior to that, Vice President of EIX responsible for strategic planning, Senior Vice President and Chief Technical Officer of EME, and Senior Vice President of EME’s worldwide operations. Mr. Litzinger is a graduate of the University of Washington with a chemical engineering degree and received a Master of Arts degree from the University of Redlands.

Mr. Litzinger brings to the SCE Board in-depth knowledge of the Company’s business, experienced leadership and an engineering background. He also brings senior executive, operations and strategic planning experience developed during his 27 years of service with the Company.

		Luis G. Nogales
		Age 70
		Director since 1993
		Committees: Audit; Compensation &
		Executive Personnel

Mr. Nogales has been managing partner of Nogales Investors, LLC, a private equity investment company, since 2001. Prior to that he served as president of Nogales Partners, a private equity investment company, president of Univision, a Spanish language television network, and chairman of the board and chief executive officer of United Press International, a communications company. Mr. Nogales is a director of KB Home and was a director of Arbitron Inc. until September 2013. He is a graduate of San Diego State University and Stanford Law School.

Mr. Nogales brings to the Board business, management and chief executive leadership experience in media and marketing enterprises and the Spanish language market, which is particularly relevant in the communities served by SCE. He also brings the perspective and insight of a director of other public companies and a private equity investor who understands shareholder concerns. He brings broad knowledge of the Company’s business and corporate history developed through 21 years of service on the Board.

		Richard T. Schlosberg, III
		Age 69
		Director since 2002
		Lead Director since 2010
		Committees: Compensation &
		Executive Personnel; Nominating/
		Corporate Governance

Mr. Schlosberg served as president and chief executive officer of The David and Lucile Packard Foundation, a private family foundation, from 1999 until his retirement in 2004. Prior to joining the foundation, he was publisher and chief executive officer of The Los Angeles Times, and executive vice president and director of The Times Mirror Company, a media communications company. He is a director of eBay Inc. and chairman of the board of the Kaiser Family Foundation. Mr. Schlosberg is a graduate of the United States Air Force Academy, and holds an MBA degree from Harvard Business School.

Mr. Schlosberg brings to the Board business, management and chief executive leadership experience in the communications industry, including in the local markets served by SCE. He also brings executive compensation expertise from his business experience and his prior experience as the Company’s Compensation and Executive Personnel Committee Chair. He has exercised independent leadership as the Company’s Lead Director, devoting significant time and attention to the Company. He brings the perspective and insight of a director of other public and private companies.

		Linda G. Stuntz
		Age 59
		New director nominee

Ms. Stuntz is being nominated for the first time to serve as a director of EIX and SCE. She has been a partner of the law firm of Stuntz, Davis & Staffier, P.C. since 1995, and served as a partner of the law firm of Van Ness Feldman LLP from 1993 to 1995. Her practice includes energy and environmental regulation. Ms. Stuntz previously served as Deputy Secretary of, and held senior policy positions in, the U.S. Department of Energy from 1989 to 1993, and served as associate minority counsel and minority counsel to the Energy and Commerce Committee of the U.S. House of Representatives from 1981 to 1987. She is a director of Raytheon Company and Royal Dutch Shell plc, and previously served as a director of Schlumberger, Ltd. and American Electric Power Company. Ms. Stuntz is a graduate of Wittenberg University and received her law degree from Harvard University.

Ms. Stuntz would bring to the Board utility and environmental law and public policy experience, which is particularly relevant to the Company’s business. Her experience as a director of other public companies, including in the energy and electric utilities industries, would also bring value to the Board.

		Thomas C. Sutton
		Age 71
		Director since 1995
		Committees: Finance, Operations &
		Safety Oversight; Nominating/
		Corporate Governance

Mr. Sutton served as chairman of the board and chief executive officer of Pacific Life Insurance Company from 1990 until his retirement in 2007. He is a director of the Public Policy Institute of California. Mr. Sutton is a graduate of the University of Toronto.

Mr. Sutton brings to the Board business and chief executive leadership experience in an industry which, like the electric utility industry, is highly regulated. He also brings extensive knowledge of finance, accounting and compensation matters. He brings significant knowledge of the Company’s business and corporate history developed through 19 years of service on the Board.

		Ellen O. Tauscher
		Age 62
		Director since September 2013
		Committee: Finance, Operations &
		Safety Oversight

Ms. Tauscher has been a strategic advisor to the law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC since 2012. Ms. Tauscher served as Under Secretary of State for Arms Control and International Security from 2009 to 2012. Prior to joining the State Department, she served from 1997 to 2009 as a member of the U.S. House of Representatives from California’s 10th Congressional District. While a member of Congress, Ms. Tauscher served on the House Armed Services Committee, the House Transportation and Infrastructure Committee and most recently as Chairman of the House Armed Services Subcommittee on Strategic Forces. Prior to serving in Congress, she worked in investment banking and the financial industry in various roles for Bache Halsey Stuart Shields, Bear Stearns & Co., Drexel Burnham Lambert and as an officer of the American Stock Exchange. Ms. Tauscher is a director of Invacare Corporation, eHealth, Inc., and the Nuclear Threat Initiative. She is a graduate of Seton Hall University.

Ms. Tauscher brings to the Board extensive government affairs and public policy experience, which is particularly relevant to the Company’s business and valuable in assessing the Company’s strategy. She also brings business and financial acumen, and a fresh perspective to Board deliberations as our newest director.

		Peter J. Taylor
		Age 55
		Director since 2011
		Committees: Audit; Compensation &
		Executive Personnel

Mr. Taylor has been the executive vice president and chief financial officer of the University of California since 2009. Prior to that he served as managing director of public finance at

Lehman Brothers and Barclays Capital from 2002 to 2009. Mr. Taylor is a director of the Kaiser Family Foundation and a member of the Board of Trustees of the J. Paul Getty Trust, serving as chair of the audit committee. Previously, he was chair of the UCLA African American Admissions Task Force and a commissioner on the California Performance Review Commission. Mr. Taylor is a graduate of the University of California Los Angeles and holds a Master’s degree in public policy analysis from Claremont Graduate University.

Mr. Taylor brings to the Board finance and public policy experience, which is particularly relevant to the Company’s infrastructure investment strategy in a highly regulated business. He also brings experience in risk management, accounting and financial reporting.

		Brett White
		Age 54
		Director since 2007
		Committees: Compensation &
		Executive Personnel (Chair);
		Nominating/Corporate Governance

Mr. White served as a managing partner at Blum Capital, a private equity firm in 2013. He served as chief executive officer of CBRE Group, Inc., a commercial real estate services firm, from 2005 to 2012, president of CBRE Group from 2001 to 2010 and, prior to that, as chairman of the Americas of CB Richard Ellis Services, Inc. He is a director of Ares Commercial Real Estate Corporation and Realogy Holdings Corporation, and a trustee of the University of San Francisco. Mr. White is a graduate of the University of California, Santa Barbara.

Mr. White brings to the Board the experience, strategic perspective, critical judgment and analytical skills of a recent chief executive officer of a public company. His real estate services industry experience is particularly relevant to the Company’s infrastructure investment strategy. He also brings the perspective of a business headquartered and doing business in the local markets served by SCE developed from his years of service at CBRE Group. This experience is valuable in Mr. White’s role as the Company’s Compensation and Executive Personnel Committee Chair.

Q: How are potential director nominees identified and selected by the Board to become nominees?

A: The Nominating/Corporate Governance Committee, comprised solely of independent directors under New York Stock Exchange LLC (“NYSE”) rules and our Corporate Governance Guidelines, is responsible for recommending director candidates to the Board.

The Committee will consider candidates recommended by shareholders if they are submitted in writing to the Corporate Secretary and include all of the information required by Article II, Section 4 of our Bylaws plus a written description, together with any supporting materials, of the following:

• Any direct or indirect business relationships or transactions within the last three years between EIX and its subsidiaries and senior management, on the one hand, and the candidate and his or her affiliates and immediate family members, on the other hand; and
   
• The qualifications, qualities, and skills of the candidate that the shareholder deems appropriate to submit to the Committee to assist in its consideration of the candidate.

The Committee also considers candidates recommended by our directors, senior management, and any director search firm retained by the Committee. Ms. Stuntz, who is a first-time director nominee, was recommended by senior management. Ms. Tauscher, who was first elected by the directors in September 2013, was recommended by senior management and considered as part of a search process conducted using a director search firm retained by the Committee. The search firm supports the process of identifying director candidates, coordinating the interview process and conducting reference checks. There are no differences in the manner in which the Committee evaluates a candidate based on the source of the recommendation.

If, based on an evaluation of the candidate’s qualifications, qualities and skills, the Committee determines to continue its consideration of a candidate, Committee members and other directors as determined by the Committee, interview the candidate. The Committee conducts any further research on the candidate that it deems appropriate. The Committee then determines whether to recommend that the candidate be nominated as a director. The Board considers the recommendation and determines whether to nominate the candidate for election.

Q: What information does the Nominating/ Corporate Governance Committee consider when recommending a director nominee?

A: For the Committee to recommend a director nominee, the candidate must at a minimum possess the qualifications, qualities and skills in our Corporate Governance Guidelines, including:

• A reputation for integrity, honesty and adherence to high ethical standards;
   
• Experience in a generally recognized position of leadership; and
   
• The demonstrated business acumen, experience and ability to exercise sound judgment in matters that relate to the current and long-term objectives of the Company.

The Committee also considers other factors and information, including the Board’s current need for additional members, the candidate’s potential for increasing the Board’s range of experience, skills and diversity, the candidate’s independence, and specific skills and experience that are relevant to our business strategy.

In nominating candidates for re-election to the Board, the Committee also considers the nature and time invested in a director’s service on other boards, the director’s Board, Board committee and annual meeting attendance, and the vote received at the prior annual meeting.

Q: How does the Nominating/Corporate Governance Committee consider diversity in identifying director candidates?

A: Our Corporate Governance Guidelines state the Board’s policy that the value of diversity on the Board should be considered. The Committee considers ethnic and gender diversity, as well as diversity of skills, backgrounds and qualifications represented on the Board, in recommending nominees for election. Since 2008, when the Committee has retained a director search firm, it instructed the firm to identify candidates reflecting ethnic and gender diversity.

The Committee evaluates its effectiveness in achieving diversity on the Board through its annual review of Board composition, which identifies ethnicity, gender and industry experience prior to recommending nominees for election.

Q: How does the Board determine which directors are considered independent?

A: Our Corporate Governance Guidelines require that the Board consist of at least a majority of independent directors and that the Audit, Compensation and Executive Personnel, and Nominating/Corporate Governance Committees be comprised solely of independent directors. The Company uses the NYSE listing standards to determine

independence. Also, the Compensation Committee charter contains additional independence requirements for committee membership.

No director will be considered independent to serve on the Board or an independent Board committee if he or she would not qualify as independent under NYSE rules. Directors who qualify as independent to serve on the Board are determined to be independent unless the director has a material relationship with the Company or its subsidiaries. Directors who qualify as independent to serve on an independent Board committee must meet any additional independence criteria prescribed by the NYSE listing standards and the applicable committee charter.

The Board has determined that the types of relationships described in Section B of Exhibit A-1 to our Corporate Governance Guidelines are not material for purposes of determining directors’ independence to serve on the Board. As a result, the Board does not consider these relationships in making independence determinations to serve on the Board.

For relationships not prohibited by NYSE rules and not covered under the categories of immaterial relationships in our Guidelines, the determination of whether a relationship is material or not, and therefore whether a director is independent to serve on the Board or not, is made in good faith by the directors. The director whose relationship is under consideration abstains from the vote regarding his or her independence.

Q: Which directors has the Board determined are independent to serve on the Board?

A: The Board has determined that director nominees Bindra, Chang, Córdova, Freeman, Nogales, Schlosberg, Stuntz, Sutton, Taylor, Tauscher and White are each independent to serve on the Board. The Board previously determined that Charles B. Curtis, who retired from the Board on April 25, 2013, was independent.

The Board reviews the independence of our directors to serve on the Board or an independent Board committee at least annually, and periodically as needed. In February 2014, prior to recommending director nominees for election, the Board confirmed that the independent directors had no relationships or transactions that disqualified them as independent to serve on the Board.

Prior to determining that director nominee Stuntz is independent, the Board considered the Company’s relationships with Ms. Stuntz and her husband disclosed under “Certain Relationships and Related Transactions” below (the “Specified Relationships”). Each Specified Relationship falls within one of the categories of immaterial relationships in Section B of Exhibit A-1 of our Corporate Governance Guidelines, and there have been no other relationships between Ms. Stuntz and the Company. The Board concluded that the Specified Relationships are not material to Ms. Stuntz’s ability to serve as an independent director of the Board under applicable NYSE listing standards or our Corporate Governance Guidelines.

Q: Who is the Lead Director and what are the Lead Director’s duties and responsibilities?

A: The Lead Director is designated annually by the independent directors, must be independent, and is expected to devote a greater amount of time to Board service than the other directors. The current Lead Director is Richard T. Schlosberg, III, who has served in that role since April 2010.

The Lead Director’s duties and responsibilities are described in our Corporate Governance Guidelines and include all of the following:

• In consultation with the non-employee directors, approve agendas and schedules for Board meetings, and approve the flow of information to the Board;
   
• Preside at all meetings at which the Chairman is not present, including executive sessions of the non-employee and the independent directors, and apprise the Chairman of the issues considered;
   
• Be available to serve as a liaison between the Chairman and the independent directors;
   
• Be available for consultation and direct communication with the Company’s shareholders and other interested parties;
   
• Call meetings of the non-employee and the independent directors when necessary and appropriate; and
   
• Perform other duties delegated by the non-employee directors.

The Lead Director’s term is one year, consistent with annual elections of directors; in practice, however, our Lead Directors have served for at least two years since 2008.

Q: Why does the Board believe that its Board leadership structure is appropriate?

A: The EIX Board has determined that the combined role of Chairman and CEO, together with an independent Lead Director having the duties described above, is currently in the best interest of our shareholders because it provides the appropriate balance between effective leadership of the Company and independent oversight of management. We have the following corporate governance practices that provide for strong independent leadership on the Board and effective oversight of management and CEO performance:

• A strong Lead Director role;
   
• A Board with ten independent directors and no former employees of the Company;
   
• Key Board committees comprised entirely of independent directors;
   
• Regular meetings in executive session without the CEO present (six meetings in 2013);
   
• Meetings in executive session with only the independent directors at least once per year (one meeting in 2013);

• A Compensation Committee that annually evaluates CEO performance in achieving company goals and objectives relevant to his compensation, determines his compensation based on its evaluation, and reports to the Board, all in executive session without the CEO present;
   
• Annual Board discussion of CEO performance in executive session without the CEO present; and
   
• Performance feedback annually provided to the CEO by the Lead Director.

The EIX Board also believes that having Mr. Craver serve in the combined role of EIX Chairman and CEO is in the best interests of our shareholders because:

• He is most familiar with our business and industry and most capable of identifying strategic priorities and leading the Board’s review of strategy;
   
• His day-to-day presence at the Company and interaction with management make him most capable of identifying and prioritizing issues and risks for the Board’s attention;
   
• The combined role conveys the Board’s confidence in his leadership to shareholders and other stakeholders; and
   
• The combined role provides clear accountability for effective leadership and results.

The EIX Board continues to monitor trends in this area and could, under different circumstances, reach a different conclusion.

The SCE Bylaws provide that the President of SCE has the duties of the Chairman. The Lead Director of EIX also serves as Lead Director of SCE. Ten of 13 directors of SCE are independent and the key Board committees are composed entirely of independent directors. The SCE Board has determined that the current leadership structure is appropriate for SCE as a subsidiary of EIX.

Q: What is the Board’s role in CEO succession planning?

A: The Board believes that CEO succession planning is one of its most important responsibilities. Our Corporate Governance Guidelines provide that the Board will annually review and evaluate succession planning and management development for the Company’s senior officers, including the CEO.

At least annually, the Board meets in executive session with the EIX CEO to discuss talent and succession planning. The discussion includes CEO succession in the ordinary course, CEO succession in the event of an emergency, and succession for other key senior management positions. The frequency of the Board’s succession planning discussions depends in part on the period until the CEO’s expected retirement. For example, the Board discussed succession planning more frequently in the year prior to the announcement that Mr. Craver would succeed the prior EIX CEO upon his retirement.

In the succession planning process, internal CEO succession candidates are identified and evaluated based on criteria considered predictive of success at the CEO level, taking into account the Company’s business strategy. The Board uses a common talent assessment format for each individual. The assessment includes a development plan for each individual.

Our Corporate Governance Guidelines provide that the Board will have opportunities to become acquainted with the senior officers of the Company and others who may have the potential to handle significant management positions. This is carried out through opportunities for officers to make presentations to the Board and Board committees, director education sessions, other business interactions, and social events intended for this purpose.

In addition to the succession planning process, the Compensation and Executive Personnel Committee annually assesses the performance of the CEO and other senior officers against individual and corporate goals. The performance review process is discussed under “Role of Compensation Committee and Executive Officers” in the Compensation Discussion and Analysis below. The Committee reports on the results to the Board.

Q: What is the Board’s role in risk oversight?

A: Our Corporate Governance Guidelines provide that one of the Board’s primary functions is to review the Company’s enterprise risk management process and monitor strategic and emerging risks. The Board annually reviews key enterprise risks identified by management, such as financial, reputational, safety and security, and compliance risks, and monitors key risks through reports and discussions regarding key risk areas at Board meetings. The Board also focuses on specific strategic and emerging risks in periodic strategy reviews. The Board annually reviews corporate goals and approves capital budgets.

Board committees have responsibility for risk oversight in specific areas as follows:

The Audit Committee is responsible for oversight of (i) risk assessment and risk management policies, (ii) major financial risk exposures, and (iii) the steps management has taken to monitor and control these exposures. In carrying out these responsibilities, the Committee semi-annually reviews the Company’s risk management processes and key enterprise risks, reviews the EIX risk management committee charter, receives regular reports on litigation, internal audits and compliance, and receives “deep dive” reports on specific risk topics at meetings. The Committee also annually reviews and approves the internal audit plan. The EIX Vice President for Risk Management regularly attends Committee meetings and reports on risk issues.

The Compensation and Executive Personnel Committee assesses and monitors risks in the Company’s compensation program. The Committee’s risk assessment process and factors considered in assessing risk are discussed under “Risk Considerations” in the Compensation Discussion and Analysis below.

Corporate Governance

The Finance, Operations and Safety Oversight Committee is responsible for oversight of risks in the Company’s capital investment activities and operations. The Committee regularly monitors the level of capital spending relative to approved capital budgets and must approve significant capital spending variances and projects that are not included in approved capital budgets. The Committee also monitors safety and operational performance metrics, significant developments related to safety, security, reliability and affordability, and the availability of appropriate resources in these areas. In carrying out its responsibility for oversight of risks in the Company’s operations, the Committee receives “deep dive” reports on key topics related to this responsibility at meetings. To the extent topics involve key Company risks, members of the Audit Committee may be invited to attend Finance, Operations and Safety Oversight Committee meetings.

The Nominating/Corporate Governance Committee advises the Board with respect to Board size and composition, Board committee composition and responsibilities, Lead Director selection and corporate governance practices that help position the Board to effectively carry out its risk oversight responsibility.

The Board believes that its leadership structure supports the Board’s risk oversight function. Independent directors chair the Board committees responsible for risk oversight, the Company has an independent Lead Director who facilitates communication between management and directors, and all directors are involved in the review of key enterprise risks.

Q: How many times did the Board meet in 2013?

A: The Board met nine times in 2013. Each director attended 75% or more of all Board and Board committee meetings he or she was eligible to attend. The Board held six executive sessions of the non-employee directors and one executive session of the independent directors.

Q: Does the Company have a policy on attendance of Director nominees at Annual Meetings?

A: Director nominees are expected to attend Annual Meetings. All of the EIX and SCE directors except Mr. Freeman attended the 2013 Annual Meeting.

Q: Are directors required to hold EIX Common Stock?

A: Yes. Within five years from the date of their initial election to the Board, directors are required to beneficially own an aggregate number of shares of EIX Common Stock or

derivative securities convertible into EIX Common Stock, excluding stock options, having a value equivalent to five times the amount of the annual Board retainer.

All directors comply with these stock ownership guidelines.

Q: Does EIX have a policy on shareholder rights plans?

A: The EIX Board has a policy to seek prior shareholder approval of the adoption of any shareholder rights plan unless, due to time constraints or other reasons consistent with the EIX Board’s fiduciary duties, a committee consisting solely of independent directors determines that it would be in the best interests of EIX shareholders to adopt the plan prior to shareholder approval. Any rights plan adopted by the EIX Board without prior shareholder approval will automatically terminate one year after adoption of the plan unless the plan is approved by EIX shareholders prior to such termination.

Q: Is SCE subject to the same corporate governance stock exchange rules as EIX?

A: No. SCE is subject to the NYSE MKT LLC rules, which exempt SCE from designated corporate governance rules for Board and Board committee composition, including director independence, the director nominations process, and the process to determine executive compensation. SCE is exempt from these rules because (i) it is a “controlled company” with over 50% of the voting power held by its parent company, EIX, and (ii) it has listed only preferred stock on the exchange.

Q: How may I communicate with the Board?

A: Shareholders and other interested parties may communicate with the Board or individual directors by following the procedures described on our website at www.edison.com/corpgov.

Q: Where can I find the Company’s corporate governance documents?

A: The EIX Bylaws, Corporate Governance Guidelines, and Board committee charters, the Director Ethics and Compliance Code applicable to all directors of EIX and SCE, and the Employee Ethics and Compliance Code applicable to all EIX and SCE officers and employees, are posted on our website at www.edison.com/corpgov.

The SCE Bylaws, Corporate Governance Guidelines and Board committee charters are posted on our website at www.sce.com/corpgov.

It is the Company’s policy that the Nominating/Corporate Governance Committee review at least annually, and periodically as needed, any transaction in the prior calendar year or any proposed transaction between the EIX companies and a related person in which the amount involved exceeds $120,000 and the related person has a material interest. A related person is generally a director, a director nominee, an executive officer, or a greater than 5% beneficial owner of any class of voting securities of EIX or SCE, and their immediate family members. This policy is stated in writing in the Committee’s charter.

The Committee’s regular procedure is to obtain from management annually, and periodically as needed, a list of the transactions with related persons described above, and to review these transactions at a meeting held in advance of recommending director nominations to the Board. The list is based on information from questionnaires completed by our directors, director nominees, and executive officers, together with information obtained from our accounts payable and receivable records. The Committee’s procedure is evidenced in the minutes and records for the Committee meeting at which the review occurred.

Director Olson

Director Olson, who has not been nominated for re-election, is a partner of the law firm of Munger, Tolles & Olson LLP, which provided legal services to the EIX companies in 2013. Such services are expected to continue in the future. The amount paid to Munger, Tolles & Olson LLP for legal services during 2013 was $11,825,581. In 2013, Mr. Olson personally provided one hour of legal services to the EIX companies.

The terms and conditions of the Company’s relationship with Munger, Tolles & Olson LLP are comparable to the terms and conditions of the Company’s relationships with other law firms.

Director Nominee Stuntz

Director nominee Linda Stuntz is an equity partner at the law firm of Stuntz, Davis & Staffier, P.C. (“SD&S”), which provided legal and lobbying services to the Company in 2013 and the first quarter of 2014. The total amount paid by the Company to SD&S in 2013 was $154,612. The Company expects the firm will continue to provide these services.

SD&S paid the Company approximately $246,000 in 2013 to sublease approximately 4,344 square feet of office space in Washington, D.C. The sublease will expire on October 31, 2014, unless SD&S elects to renew the lease for an additional year.

Ms. Stuntz’s spouse, Reid Stuntz, was retained by the Company through the law firm of Hogan Lovells US LLP (“Hogan Lovells”) to provide legal and lobbying services to the Company in 2013 and the first quarter of 2014. The amount paid by the Company to Hogan Lovells for Mr. Stuntz’s services in 2013 represented approximately $50,000 of the $1,777,682 in total fees paid to Hogan Lovells in 2013. Mr. Stuntz is of counsel at Hogan Lovells and the Company has been advised by Mr. Stuntz that his compensation is not determined by the amount of time he bills to the Company, nor is his job or position dependent upon the services he personally provides to the Company. The Company expects Mr. Stuntz will continue to provide these services.

The Audit Committee’s duties and powers, which are described in its charter, include the following:

• Appoint the independent registered public accounting firm.
   
• Assist the Board in its oversight of:

• Meet regularly, including in executive sessions, with management, the independent registered public accounting firm, and the internal auditors to make inquiries regarding the manner in which the responsibilities of each are being discharged and any management biases with respect to judgments, estimates, significant accounting

policies and disclosures, or difficulties in obtaining appropriate information.

• Meet regularly in executive sessions with the EIX Chief Ethics and Compliance Officer to address ethics and compliance issues.
   
• Recommend to the Board the inclusion of the year-end audited financial statements in the Company’s Annual Report.
   
• Review with the independent registered public accounting firm management’s estimates for significant transactions that impact financial reporting.
   
• Review with the independent registered public accounting firm the scope of audit and other engagements and the related fees, their independence, the adequacy of internal accounting controls, the firm’s quarterly reports on critical accounting matters that arose during the quarter, and the year-end audited financial statements.
   
• Oversee the Company’s (i) risk assessment and risk management policies, (ii) major financial risk exposures and (iii) the steps management has taken to monitor and control these exposures.
   
• Establish and maintain procedures for the receipt, retention and treatment of complaints the Company receives regarding accounting, internal accounting controls or auditing matters.

Board Committees

The EIX Audit Committee also reviews at least semi-annually (i) any changes to the Company’s political contribution policies and (ii) a written report of political contributions and related political expenditures of the Company and its consolidated subsidiaries, political action committee and civic action committee. The EIX Committee approves all political contributions in excess of $1 million.

Compensation and Executive Personnel Committee

The Compensation and Executive Personnel Committee’s duties and powers, which are described in its charter, include the following:

• Review the performance and set the compensation of designated elected officers, including the executive officers.
   
• Review director compensation for consideration and action by the Board. 
   
• Approve the design of executive and director compensation programs, plans and arrangements.
   
• Approve stock ownership guidelines for officers and recommend guideline changes for directors.
   
• Review and assess whether any risks arising from compensation policies and practices are reasonably likely to have a material adverse effect on the Company.

Nominating/Corporate Governance Committee

The Nominating/Corporate Governance Committee’s duties and powers, which are described in its charter, include the following:

• Periodically review Board size and composition and identify and recommend director candidates.
   
• Make recommendations to the Board regarding Board committee, committee chair and Lead Director assignments.
   
• Review related party transactions.

• Periodically review and recommend updates to the Corporate Governance Guidelines and Board committee charters.
   
• Advise the Board with respect to corporate governance matters.
   
• Oversee the evaluation of the Board and Board committees. 
   
• Review the orientation program for new directors and continuing education activities for all directors.

Finance, Operations and Safety Oversight Committee

The Finance, Operations and Safety Oversight Committee’s duties and powers, which are described in its charter, include the following:

• Review and monitor capital spending compared to budget.
   
• Approve significant capital spending variances and significant capital projects not included in the budget.
   
• Monitor operational and service excellence performance metrics and significant developments relating to safety, reliability and affordability, specifically including performance and developments in the areas of cybersecurity, business resiliency and emergency response, and the availability of appropriate resources to achieve objectives in these areas.

Director Compensation

Annual Retainer and Meeting Fees

Compensation for non-employee directors during 2013 included an annual retainer, fees for attending meetings, and an annual equity award. Directors were offered the opportunity to receive all of their compensation on a deferred basis under the EIX Director Deferred Compensation Plan. The following table sets forth the current retainers and meeting fees:

The annual Board retainer was increased from $60,000 to $65,000 effective July 1, 2013.

Directors receive only one meeting fee for each Board or Board committee meeting held jointly or consecutively, and for joint meetings of more than one committee. It is the usual practice that meetings of the EIX and SCE Boards and Board committees are held jointly and a single meeting fee is paid for each joint meeting.

All directors are also reimbursed for out-of-pocket expenses incurred for serving as directors and are eligible to participate in the Director Matching Gift Program described above in footnote (5) to the “Director Compensation” table.

Annual Equity Awards

Upon re-election or initial election to the Board in April 2013 or thereafter, non-employee directors were granted an annual equity award of EIX Common Stock (or deferred stock units, as explained below) with an aggregate grant date value of $110,000. Non-employee directors who are re-elected to the Board in April 2014 will be granted an equity award (or deferred stock units) with an aggregate grant date value of $115,000. If a director is initially elected at or after the 2014 Annual Meeting, he or she will be granted an award of EIX deferred stock units with an aggregate grant date value of $115,000 on the date of election.

The number of shares or units granted is determined by dividing the value of the equity award ($110,000 or $115,000, as described above) by the closing price of EIX Common Stock on the date of election or re-election and rounding up to the next whole share.

Directors have the opportunity to elect in advance to receive their re-election award entirely in EIX Common Stock, entirely in deferred stock units, or in any combination of the two. A deferred stock unit is a contractual right to receive one share

of EIX Common Stock. Deferred stock units are credited to the director’s account under the EIX Director Deferred Compensation Plan described below. Deferred stock units cannot be voted or sold and accrue dividend equivalents on the ex-dividend date, if and when dividends are declared on EIX Common Stock, that are converted to additional deferred stock units.

Each director’s equity award in 2013 was granted under the EIX 2007 Performance Incentive Plan. Directors serving on both Company Boards receive only one award per year.

EIX Director Deferred Compensation Plan

As part of the 2008 Internal Revenue Code Section 409A amendments, the EIX Director Deferred Compensation Plan was separated into two different plan documents. The grandfathered plan document applies to deferrals that were earned prior to January 1, 2005, while the 2008 plan document applies to deferrals that were earned on or after January 1, 2005.

Non-employee directors are eligible to defer up to 100% of their annual retainers and meeting fees. Any portion of a director’s annual equity award that he or she elects to receive as deferred stock units is automatically deferred. Amounts deferred (other than deferred stock units) accrue interest until paid to the director at a rate equal to the average monthly Moody’s Corporate Bond Yield for Baa Public Utility Bonds over a 60-month period ending November 1 of the prior year.

Payment of Grandfathered Plan Benefits

Amounts deferred under the grandfathered plan document (other than deferred stock units) may be deferred until a specified date, retirement, death or discontinuance of service as a director. At the director’s election, any such compensation that is deferred until retirement or death may be paid as a lump sum, in monthly installments over 60, 120, or 180 months, or in a combination of a partial lump sum and installments. Any such deferred compensation is paid as a single lump sum or in three annual installments upon any other discontinuance of service as a director. Directors may elect at the time of deferral to receive payment on a fixed date in accordance with procedures established. Deferred amounts may also be paid in connection with a change in control of EIX or SCE in certain circumstances.

Deferred stock units may be deferred until retirement, death or discontinuance of service as a director. The deferred stock units will be distributed in EIX Common Stock in a lump sum upon the director’s retirement, unless a request to receive distribution in the form of annual installments over 5, 10, or 15 years was previously approved. Discontinuance of service as a director prior to retirement will result in a lump sum payout of deferred stock units in EIX Common Stock. Upon the director’s death, any remaining deferred stock unit balance will be paid to the director’s beneficiary in a lump

Director Compensation

sum in EIX Common Stock. Deferred stock units may also be paid in connection with a change in control of EIX or SCE in certain circumstances.

Payment of 2008 Plan Benefits

Any amounts deferred under the 2008 plan document (including deferred stock units) may be deferred until a specified date no later than the date the director turns age 75, retirement, death, disability or other separation from service. Directors have sub-accounts for each annual deferral for which the following forms of payment may be elected:

• Single lump-sum;
   
• Two to fifteen annual installments;
   
• Monthly installments for 60 to 180 months; or
   
• Any combination of the above.

Payments triggered by retirement, death, disability or other separation from service may begin upon the applicable triggering event or a specified number of months and/or years following the applicable triggering event. However, payments may not begin later than the director’s 75^th birthday unless the director is still on the Board. Payments are subject to certain administrative earliest payment date rules, and may be delayed or accelerated in accordance with the 2008 plan document if permitted or required under Section 409A of the Internal Revenue Code.

If a director who was eligible to participate in the plan on or before December 31, 2008 dies within ten years of his or her initial eligibility to participate in the plan, the amount of the director’s remaining deferred compensation account balance that will be paid to his or her beneficiary will be doubled. However, deferred stock units and any amounts attributable to dividend equivalents previously associated with stock options will not be doubled. All amounts payable are treated as obligations of EIX.

Retirement Plan for Directors

Directors Nogales and Olson participate in the Retirement Plan for Directors. No new director after 1997 may participate in the plan. Each participating director is generally entitled to quarterly payments, commencing upon his retirement, resignation or death, based on the amount of the annual retainer and regular Board meeting fees in effect at the time of such termination of service unless another payment schedule was elected under Section 409A of the Internal Revenue Code. The annual benefit for directors Nogales and Olson will be payable in quarterly installments for a number of years equal to the years of his service as a director prior to 1998. Years of service for benefit determination purposes were frozen at the end of 1997. However, the present value of these frozen benefits can change over time.

Stock Ownership

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements. The Audit Committee has selected PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for calendar year 2014. The Company is asking shareholders to ratify this appointment.

PwC is an international accounting firm which provides leadership in public utility accounting matters. Representatives of PwC are expected to attend the Annual Meeting to respond to appropriate questions and to make a statement if they wish.

PwC has been retained as the Company’s independent registered public accounting firm continuously since 2002. The Audit Committee meets annually in executive session without PwC present to evaluate the performance of PwC, taking into consideration the quality of PwC’s written reports and meetings with the Committee, PwC’s industry knowledge from an accounting and tax perspective, PwC’s continued independence and professional skepticism, the Committee’s discussions with management about PwC’s performance, and information available from Public Company Accounting Oversight Board (“PCAOB”) inspection reports, among other

things. The Audit Committee annually considers whether there should be a rotation of the independent external audit firm and, in conjunction with the mandated rotation of the audit firm’s lead engagement partner, is involved in the selection of PwC’s lead engagement partner.

The Audit Committee considered a number of factors when determining whether to reappoint PwC as the Company’s independent registered public accounting firm, including the length of time PwC has been engaged, the quality of the Audit Committee’s ongoing discussions with PwC, and an assessment of the professional qualifications, utility industry experience and past performance of PwC, its lead engagement partner, and other members of the core engagement team. The Audit Committee and the Board believe that the continued retention of PwC to serve as the Company’s independent external auditor is in the best interests of the Company and its investors.

The Company is not required to submit this appointment to a shareholder vote. Ratification would be advisory only. However, if the shareholders of either EIX or SCE do not ratify the appointment, the appropriate Audit Committee will investigate the reasons for rejection by the shareholders and will reconsider the appointment.

The Audit Committee annually approves all proposed audit fees in executive session without PwC present, taking into consideration a number of factors, including a breakdown of the services to be provided, proposed staffing and hourly rates, and changes in the Company and industry from the prior year. The audit fees are the culmination of a process approved by the Audit Committee and implemented by the Company and PwC. This process addressed the balancing act of designing an audit scope that could achieve a high quality audit, driving efficiencies from both the Company and PwC while compensating PwC fairly.

The Audit Committee is required to pre-approve all audit and permitted non-audit services performed by PwC to ensure

that these services will not impair the firm’s independence. The Committee’s pre-approval responsibilities may be delegated to one or more Committee members, provided that such delegates present any pre-approval decisions to the Committee at its next meeting. The Committee has delegated such pre-approval responsibilities to the Committee Chair. PwC must assure that all audit and non-audit services provided to the Company have been approved by the Audit Committee.

During the fiscal year ended December 31, 2013, all services performed by PwC were pre-approved by the Audit Committee, irrespective of whether the services required pre-approval under the Exchange Act.

The Audit Committee is composed of five non-employee directors and operates under a charter adopted by the Board, which is posted on our website at www.edison.com/corpgov. The Board has determined that each Audit Committee member is independent and financially literate, and that at least one member has accounting or other related financial management expertise, as such qualifications are defined by NYSE rules, our Corporate Governance Guidelines, and/or the charter. The Board has also determined that Ms. Chang qualifies as an “audit committee financial expert” as defined by SEC rules.

The scope of the Audit Committee’s duties and the Committee’s role in risk oversight are described in “Board Committees – Audit Committee” and “Information About Our Corporate Governance – Q: What is the Board’s role in risk oversight?” Audit Committee meeting agendas are developed based on input from each Committee member, the independent registered public accounting firm, the General Auditor, and management.

Management is responsible for the Company’s internal controls and the financial reporting process, including the integrity and objectivity of the financial statements. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s financial statements in accordance with the standards of the PCAOB and issuing a report thereon. The Audit Committee monitors and oversees these processes. The Committee members are not accountants or auditors by profession

and, therefore, have relied on certain representations from management and the independent registered public accounting firm about carrying out its responsibilities.

In discharging our oversight responsibilities in connection with the December 31, 2013 financial statements, the Audit Committee:

• Reviewed and discussed the audited financial statements with the Company’s management;
   
• Discussed with PwC, the Company’s independent registered public accounting firm, the matters required by Auditing Standard No.16, as adopted by the PCAOB; and
   
• Received the written disclosures and the letter required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence, and discussed with PwC its independence from the Company.

Based upon these reviews and discussions, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s 2013 Annual Report to be filed with the SEC.

Vanessa C.L. Chang, Chair
Jagjeet S. Bindra
France A. Córdova
Luis G. Nogales
Peter J. Taylor

The advisory vote to approve the Company’s executive compensation, commonly known as “Say-on-Pay,” gives shareholders the opportunity to endorse or not endorse our executive compensation. This advisory vote is required by SEC rules to be provided at least once every three years. However, in 2011, our shareholders voted in favor of holding the advisory vote every year, and the Board determined that it would be held annually. The advisory vote to approve EIX’s executive compensation received support from approximately 94% of the votes cast in both 2012 and 2013.

Our executive compensation is described under “Compensation Discussion and Analysis” below. We encourage you to read it carefully. Our executive compensation program is reviewed and approved by the Compensation and Executive Personnel Committee. The Board believes our competitive compensation structure aligns executive compensation with shareholder value and serves shareholders well.

EIX and SCE request shareholder approval of the compensation paid to the Company’s named executive

officers, as disclosed in this Proxy Statement pursuant to the SEC’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables.

The Company values constructive dialogue with shareholders on compensation and other important governance matters. Because your vote is advisory, it will not be binding on the Board or the Company and will not be construed as overruling a decision by the Board or the Company. However, the Compensation and Executive Personnel Committee will consider the outcome of the vote and any constructive feedback from shareholders when making future executive compensation decisions. See “Shareholder Communication and Compensation Program for 2014” in the Compensation Summary of the Compensation Discussion and Analysis below.

It is expected that the next such vote will occur at the 2015 Annual Meeting.

This Compensation Discussion and Analysis (“CD&A”) describes the principles of our executive compensation program, how we applied those principles in compensating our named executive officers (“NEOs”) for 2013, and how we use our compensation program to drive performance. We also discuss the role and responsibilities of our Compensation and Executive Personnel Committee (the “Committee”) in determining executive compensation. The CD&A is organized as follows:

• Compensation Summary
   
• What We Pay and Why: Elements of Total Direct Compensation

• How We Make Compensation Decisions
   
• Other Compensation Benefits
   
• Other Compensation Policies and Guidelines

The CD&A contains information that is relevant to your decision regarding the advisory vote to approve our executive compensation (Item 3 on your proxy card). When voting on Item 3, EIX shareholders will vote on EIX executive compensation, while SCE shareholders will vote on SCE executive compensation.

Our Business and Strategy

EIX’s core business is conducted by its subsidiary SCE, a rate-regulated electric utility that supplies electric energy to an approximately 50,000 square-mile area of southern California. SCE’s strategy is to provide customers safe, reliable and affordable electricity as a foundation for long-term sustainable growth and shareholder value. SCE’s investment focus is on transmission and distribution infrastructure. EIX’s strategy includes investing in, owning, and operating competitive businesses in the electricity industry, with a focus on commercial and industrial energy services. The Company is committed to driving operational and service excellence to achieve its strategic objectives.

2013 Financial Highlights

Significant results for EIX in 2013 include:

• Our consolidated core earnings⁽¹⁾ of $1.237 billion ($3.80 per share) exceeded our goal of $1.173 billion ($3.60 per share);
   
• Our stock price increased 2.5%, while the Philadelphia Utility Index increased 6.5%; and
   
• Our total shareholder return (“TSR”)⁽²⁾ was 5.5%, which was at the 35^th percentile of the Philadelphia Utility Index.

EIX’s consolidated core earnings exceeding our goal was a key factor in determining 2013 annual incentive awards for EIX. The determination of annual incentive awards is described under “Annual Incentive Awards” below. EIX’s relative TSR performance contributed to the below-target payout of performance shares described under “Long-Term Incentive Awards” below.

2013 NEO Pay

The following table shows EIX NEOs’ total direct compensation for 2013 compared to 2012. Total direct compensation consists of base salary, annual incentive awards and long-term incentive awards (columns (c), (e), (f) and (g) of the EIX Summary Compensation Table).

As shown above, the 2013 total direct compensation for EIX NEOs other than Mr. Valdman was within two percent of their 2012 total direct compensation. Mr. Valdman’s increase of eleven percent was mostly attributable to increases in his long-term incentive awards as a percentage of base salary and his target annual incentive as a percentage of base salary. These increases brought these elements of compensation closer to market median for Mr. Valdman.

More information on the reasons for changes in compensation from 2012 to 2013 is under “What We Pay and Why: Elements of Total Direct Compensation” below.

How Our CEO Pay Aligns With Performance

During the period from 2009 (Mr. Craver’s first full year as CEO) to 2013, EIX’s TSR and Mr. Craver’s total direct compensation increased at a comparable rate. The following chart shows the alignment between Mr. Craver’s total direct compensation over the past five years and our indexed TSR, which represents the value of an initial investment of $100 in EIX common stock at the beginning of the five-year period, and assumes that dividends are reinvested.

CEO Total Direct Compensation (TDC)
vs. Indexed TSR 2009-2013

The value attributed to equity awards in the chart above is the grant date fair value reported in the Summary Compensation Table of Company Proxy Statements. It does not reflect those equity awards’ realized value, which largely depends on the appreciation or depreciation of EIX stock after the grant date. Another driver of realized value that is not reflected in grant date values is the actual payout of our performance share awards compared to target. Since EIX’s performance from

2009 through 2013, as measured by relative TSR compared to peers, was below median, performance share payouts have been below target. The result of this tie between pay and performance is that the total value realized by Mr. Craver from his 2009, 2010, and 2011 performance share awards was approximately $1.6 million less than the total grant date fair value of those awards reported in the Summary Compensation Table and included as part of the CEO total direct compensation in the chart above.

The following chart shows the difference for Mr. Craver between the target number of shares at grant and the number of shares vested at payout for each of the three most-recently completed performance periods.

CEO Performance Shares –
Number of Shares at Grant vs. at Payout

How Our CEO Pay Compares to Peer
Group Median

The following chart shows Mr. Craver’s total direct compensation for the last five years as reported in the EIX Summary Compensation Table, compared to the Philadelphia Utility Index peer group median. (The chart uses 2012 peer group data for 2013 since peer group data for 2013 was generally unavailable in time for inclusion in this Proxy Statement.)

Mr. Craver’s total direct compensation was below the peer group median for 2009 and 2010. In 2011, 2012 and 2013, Mr. Craver’s total direct compensation was above the peer group median, largely because the peer group median decreased from 2010 to 2011, primarly driven by chief executive officer turnover, and then only partially recovered in 2012. Another significant factor was that Mr. Craver’s annual incentive awards for 2011, 2012 and 2013 were above target, largely due to above-target core earnings, as discussed in the Company’s 2012 and 2013 Proxy Statements and under “Annual Incentive Awards” below.

CEO vs. Peer Group Median TDC

As discussed in “Use of Competitive Data” below, the Committee uses peer group data and data from pay surveys to determine market compensation. The additional data provides a more robust set of information for making compensation decisions. In February 2013, the Committee used data from three pay surveys, in addition to peer group data, to set Mr. Craver’s 2013 target total direct compensation at the projected market median level for 2013.

Shareholder Communication and
Compensation Program for 2014

In 2013, the advisory vote to approve EIX’s executive compensation received support from approximately 94% of the votes cast. The Committee reviewed the results of our shareholder vote, including feedback from major shareholders. Taking the vote results and shareholder feedback into account, and considering trends in executive compensation and the best interests of shareholders, the Committee approved maintaining our executive compensation program without any significant changes for 2014.

Our executive compensation program seeks to achieve three fundamental objectives:

• Attract and retain qualified executives;
   
• Focus executives’ attention on specific financial, strategic and operating objectives of the Company that we believe will increase shareholder value and benefit customers; and
   
• Align executive pay directly with shareholder return through long-term incentives.

We target the market median for each element of total direct compensation offered under our program: base salaries, annual cash incentives, and long-term equity-based incentives. The Committee’s determination of market compensation and its ability to occasionally vary from market median are discussed in “Use of Competitive Data” below.

The reasons for the Committee’s decision to target the median level include:

• The policy of the applicable regulatory authorities that SCE should provide market level compensation, and the desire for internal compensation equity between EIX and SCE;
   
• Above-median compensation generally has not been necessary, except occasionally for recruitment and retention purposes; and
   
• Below-median compensation would create retention and recruitment difficulties.

A significant portion of our total direct compensation is tied to company performance. The following charts show that incentive compensation comprised approximately 85% of our CEO’s 2013 target total direct compensation and approximately 67% on average of our other NEOs’ 2013 target total direct compensation. Most of the target incentive compensation was in the form of long-term incentives.

CEO Pay MIx

Other NEO Pay Mix

This pay mix provides an opportunity for NEO compensation to reflect the upside and downside potential of company performance and helps to focus their attention on our financial, strategic and operating objectives, and shareholder return.

Base Salary

We pay our NEOs a fixed base salary to attract talented executives. For 2013, each NEO’s base salary was evaluated according to his or her position and performance. For each position, a base salary range was determined, consisting of a minimum, median and maximum. The Committee targets the market median level of base salaries for comparable positions. None of our NEOs has a contractual right to receive a fixed base salary.

The salary increases between 2012 and 2013 shown in the Summary Compensation Tables for Messrs. Scilacci, Litzinger, Dietrich, and Swartz were made to bring their salaries closer to the market median for comparable positions. The Committee increased the salaries of Messrs. Adler and Valdman and set them above the market median after deciding the salaries were appropriate in light of their individual performance and overall responsibilities and contributions.

Annual Incentive Awards

Executive Incentive Compensation Plan

NEOs are eligible for annual incentive awards under the EIX Executive Incentive Compensation Plan for achieving specific financial, strategic and operational goals pre-established at the beginning of each year. The target value for each NEO is stated as a percentage of base salary and is based on the market median of target annual incentive awards for comparable positions. The minimum award is $0. The

maximum award is 200% of target, which the Committee’s independent compensation consultant, Frederic W. Cook & Co., Inc. (“F.W. Cook”), has advised is the most prevalent practice among the peer group companies.

The Committee determines annual incentive awards based on corporate and individual performance. The corporate performance factor is based on performance relative to the pre-established goals. For each goal category, the Committee assigned a target score reflecting the relative

weight given that goal category and a potential score range. In February 2014, the Committee determined the score achieved for each goal category, depending on the extent to which the goals were unmet, met or exceeded.

Separate goals were established for EIX and SCE. Annual incentive awards for the EIX NEOs (other than Mr. Litzinger) were based on EIX performance. Annual incentive awards for the SCE NEOs, including Mr. Litzinger, were based on SCE performance.

2013 Annual Incentive Awards

Based on 2013 performance, the corporate performance factors for EIX and SCE were 135% of target. These factors were determined by adding the “Actual Scores” noted above. The Committee did not exercise its discretion to increase or decrease the corporate performance factor from the amount determined by application of the scoring matrix.

The Committee determined the annual incentive award for each NEO by multiplying the annual incentive target percentage for the NEO by the corporate performance factor

and an individual performance factor. Individual performance factors were determined by the Committee in its discretion, based on its assessment of each NEO’s performance and achievements for the year, and relative impact and contribution compared to executives in similar roles. The maximum award is two times the target percentage. The resulting annual incentive awards to our EIX NEOs were as follows:

Target and actual annual incentive awards for all NEOs are shown in the Grants of Plan-Based Awards tables and the Summary Compensation Tables, respectively.

Impact of Other Plans

To qualify annual incentive awards as deductible performance-based compensation under Section 162(m) of the Internal Revenue Code, the EIX Committee adopted the EIX 2013 Executive Annual Incentive Program (“162(m) Program”). Under this Program, an overall maximum annual incentive award for 2013 was established for each participating EIX NEO as a specified percentage of an annual incentive award pool. The aggregate award pool had a maximum value equal to 1.5% of EIX’s 2013 consolidated earnings from continuing operations (after interest, taxes, depreciation and amortization), subject to adjustment for the effects of any special charges to earnings. The actual annual incentive awarded to each participating EIX NEO under the Executive Incentive Compensation Plan for 2013 was less than the applicable maximum under the 162(m) Program. Thus, all such compensation was tax-deductible under Section 162(m).

Long-Term Incentive Awards

We provide our NEOs with long-term incentives that are directly linked to the value provided to EIX shareholders. All of our long-term incentives are awarded as equity instruments reflecting, or valued by reference to, EIX Common Stock. Long-term incentive awards are made under the EIX 2007 Performance Incentive Plan.

Long-Term Incentive Mix

In 2013, each NEO’s long-term incentive award value was in the form of 50% non-qualified stock options, 25% performance shares, and 25% restricted stock units. The Committee believes the long-term incentive award allocations strike an appropriate balance among equity awards that reward:

• Absolute shareholder return (non-qualified stock options);
   
• Relative shareholder return compared to peers and earnings per share compared to pre-established targets (performance shares); and
   
• Retention over a multi-year vesting period with value tied to the price of EIX stock (restricted stock units).

These equity awards align executives’ interests with the long-term interests of shareholders and customers by enhancing their focus on the Company’s long-term goals.

75% of our long-term equity mix is performance-based. In addition to the performance shares, we believe stock options are performance-based because NEOs will realize value only if the market value of EIX Common Stock appreciates over time.

Long-Term Incentive Value

The target value of each NEO’s long-term incentive award was set as a percentage of base salary, and based on the market median level of target long-term incentive award values for comparable positions. For 2013, the Committee increased the target, as a percentage of base salary, for Messrs. Craver, Valdman, and Dietrich and for Ms. Sullivan, and decreased the target for Messrs. Litzinger and Swartz. These changes brought these NEOs’ target values closer to market median.

On February 27, 2013, the Committee approved award values for each NEO, as well as the methodology for converting those values into the number of stock options, performance shares, and restricted stock units granted to each NEO on the March 1, 2013 grant date. The grant date value of each award is listed in the Grants of Plan-Based Awards tables below.

Stock Options

Each stock option granted may be exercised to purchase one share of EIX Common Stock at an exercise price equal to the closing price of a share of EIX Common Stock on the applicable grant date. Options vest over a four-year period, subject to continued employment, with one-fourth of each award generally vesting and becoming exercisable at the beginning of each year.

The number of options granted to each NEO was determined by dividing the option award value approved by the Committee for that NEO by the grant date value of an option using a Black-Scholes Merton valuation model.

Performance Shares

Performance shares reward performance over three years against pre-established metrics. Each performance share awarded is a contractual right to receive one share of EIX Common Stock or its cash equivalent if performance and continued service vesting requirements are satisfied. The amount realized in the performance share portion of an NEO’s long-term award can range from zero to 200% of target, and depends on the performance against pre-established metrics. The performance share awards provide for reinvested dividend equivalents. For each dividend declared for which the ex-dividend date falls within the performance period and after the date of grant, the NEO will be credited with an additional number of target performance shares subject to the same terms and conditions as the original performance shares.

2012 and 2013 Performance Share Awards

For performance shares granted in 2012 and 2013 (none of which have yet vested), two metrics will be used to measure payouts, with each metric weighted 50%. One of the two performance metrics is based on the percentile ranking of EIX’s TSR for the three-year performance period beginning January 1 in the year of grant compared to the TSR of each stock in EIX’s peer group for the same period. The following chart provides the percentile ranking and corresponding payout levels:

If EIX achieves a TSR ranking between the 25^th percentile and the 50^th percentile or between the 50^th percentile and the 75^th percentile, the number of shares paid will be interpolated on a straight-line basis with discrete intervals at every 5^th percentile. For purposes of determining performance share payouts, TSR is calculated using the difference between (i) the average closing stock price for the relevant stock for the 20 trading days ending with the last NYSE trading day preceding the first day of the performance period and (ii) the average closing stock price for the relevant stock for the 20 trading days ending with the measurement date, and assumes all dividends are reinvested on the ex-dividend date.

The second performance metric for performance shares granted in 2012 and 2013 is based on EIX’s three-year average annual core earnings per share (“EPS”), measured against target levels. Core EPS is defined as GAAP basic EPS, excluding income or loss from discontinued operations and income or loss from significant discrete items that are not representative of ongoing earnings. The Committee establishes the EPS target for each calendar year in February of that year. After the three-year performance period, the Committee will certify the EPS performance multiple for each calendar year in the performance period, based on EIX’s actual EPS performance as a percentage of the EPS target for that year, in accordance with the following chart:

If EIX’s EPS for a year as a percentage of target EPS is between 80% and 100% or between 100% and 120%, the EPS performance multiple will be interpolated on a straight-line basis, with discrete intervals at every 4^th percentile. The EPS performance multiples achieved for each calendar year in the three-year performance period will be averaged, and the resulting average will determine the performance share payout as a multiple of target.

The performance shares generally are paid half in EIX Common Stock and half in cash having a value equal to the EIX Common Stock that otherwise would have been delivered. EIX converts a portion of the awards otherwise payable in stock to cash to the extent necessary to satisfy minimum tax withholding or any governmental levies. NEOs may elect to defer payment of the portion of performance shares payable in cash under the Executive Deferred Compensation Plan.

A conversion formula was used to determine the number of TSR performance shares awarded to each NEO. The formula involved dividing the award value approved by the Committee by the grant date value of the TSR performance shares using a Standard Monte Carlo simulation model. As to EPS performance shares, the respective grant date value was converted into a specific number of EPS performance shares by dividing the grant date value by the closing price of a share of EIX Common Stock on the grant date.

2006-2011 Performance Share Awards

Performance shares granted between 2006 and 2011 (including the performance shares that vested in 2013) utilized only one metric—the TSR metric described above—except that the threshold for a payout was set as a 40^th percentile TSR ranking. EIX’s TSR from 2011-2013 ranked in the 40^th percentile of the peer group and resulted in a payout of the 2011 performance share grants at 25% of target. EIX’s TSR from 2009-2011 ranked in the 45^th percentile of the peer group and resulted in a payout of the 2009 performance share grants at 63% of target. Relative TSR as compared to our peer group for the 2010-2012, 2008-2010, 2007-2009, and 2006-2008 performance periods was below the threshold required for payout of the performance shares, resulting in no payouts.

Restricted Stock Units

Each restricted stock unit awarded is a contractual right to receive one share of EIX Common Stock if continued service vesting requirements are satisfied. The restricted stock units for NEOs provide for reinvested dividend equivalents. For each dividend declared for which the ex-dividend date falls within the vesting period, the NEO will be credited with an additional number of restricted stock units subject to the same terms and conditions as the original restricted stock units.

The restricted stock units are paid in EIX Common Stock, except EIX converts awards to cash having a value equal to the stock that otherwise would have been delivered to satisfy minimum tax withholding and governmental levies. The EIX Committee may elect to pay any restricted stock units in cash rather than shares of EIX Common Stock if and to the extent that payment in shares would exceed the applicable share limits of the EIX 2007 Performance Incentive Plan.

The number of restricted stock units granted to each NEO was determined by dividing the grant date value approved by the Committee for that NEO by the closing price of a share of EIX Common Stock on the grant date. At payout, NEOs realize an increase or decrease in value compared to the grant date value that is commensurate with the increase or decrease in value realized by shareholders from changes in the stock price and dividends over the three-year vesting period.

Acceleration of Long-Term Equity

If an NEO terminates employment after reaching age 65, or age 61 with five years of service, (i) stock options will vest and continue to become exercisable as scheduled, (ii) performance shares will be retained with vesting based on

the applicable performance metrics, and (iii) restricted stock units will vest and become payable as scheduled; in each instance, subject to a pro-rated reduction if the NEO retires within the year of grant. Messrs. Craver, Adler, and Swartz are eligible for these accelerated vesting provisions. If an NEO dies or becomes disabled while employed, stock options and restricted stock units will immediately vest and become exercisable and payable, respectively, and performance shares will be retained.

Role of Compensation Committee and Executive Officers

The Committee is responsible for reviewing and determining the compensation paid to executive-level Company officers, including the NEOs. The Committee annually reviews all components of compensation for our CEO and other NEOs. This review encompasses all forms of compensation, including base salary, annual and long-term incentives, and other benefits, as well as amounts pursuant to retirement and non-qualified deferred compensation plans.

Toward the start of each year, the Committee approves the base salary range, and the target and maximum potential annual and long-term incentive award values for each officer. The annual and long-term incentive target awards are stated as percentages of base salary and are based on the market median of target annual and long-term incentive award values for comparable positions. Each February, after performance results for the prior year are finalized, the Committee determines annual incentive awards for the prior year and performance share payouts for the prior performance period. At that time, the Committee also approves base salary changes and long-term incentive grants for the current year. Base salary changes are effective in March of each year.

The CEO provides the Committee with recommendations regarding the compensation of the NEOs (other than his own). Other NEOs participate in developing and reviewing executive compensation recommendations, but do not participate in recommendations regarding their own compensation.

The Committee evaluates the CEO’s performance and determines his compensation in executive session without the CEO present. The Chair reports to the Board in a

non-management executive session regarding the evaluation and the compensation determination.

For Company officers who are not executive officers, the Committee has authorized the CEO and the EIX executive responsible for executive compensation matters to jointly approve special relocation, recruitment and retention awards within specific limits pre-approved by the Committee. Mid-year compensation determinations for newly hired and promoted officers who are not EIX executive officers that are within guidelines previously approved by the Committee do not require additional Committee approval.

Tally Sheets

The Committee reviewed tally sheets for the EIX NEOs. Tally sheets provide the Committee with information about the following components of compensation paid over the three-year period ending December 31, 2013:

• Cash compensation (base pay and annual incentives);
   
• Equity award values (stock options, performance shares and restricted stock units); and
   
• Changes in pension values and non-qualified plan earnings.