UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

Filed by the Registrant ☒  Filed by a Party other than the Registrant ☐

Check the appropriate box:

Dominion Energy, Inc.

(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

Notice of 2019 Annual Meeting of Shareholders

ITEMS OF BUSINESS: Matters to be voted on at the 2019 Annual Meeting of Shareholders (2019 Annual Meeting) are as follows:

RECORD DATE: You can attend the meeting and vote if you were a shareholder of record at the close of business on March 1, 2019.

PROXY VOTING: Each share of Dominion Energy, Inc. (Dominion Energy) common stock is entitled to one vote on each matter properly brought before the meeting. Please vote by proxy as soon as possible. Your vote is very important to us, and we want your shares to be represented at the meeting.

If you plan to attend the meeting, please see How do I attend the 2019 Annual Meeting in person? on page 73 for admission requirements.

This Proxy Statement, our 2018 Summary Annual Report and Dominion Energy’s Annual Report on Form 10-K for the year ended December 31, 2018, will be made available to shareholders electronically on or around March 25, 2019, or mailed on or around the same date to those shareholders who have previously requested printed materials.

Dated: March 25, 2019

By Order of the Board of Directors,

Carter M. Reid

Executive Vice President, Chief Administrative &

Compliance Officer and Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials for the

2019 Annual Meeting of Shareholders to be held on May 7, 2019

Dominion Energy’s Notice of Annual Meeting, 2019 Proxy Statement, 2018 Summary Annual Report and 2018 Annual Report on Form 10-K are available on our website at investors.dominionenergy.com/proxy.

Table of Contents

Proxy Statement Summary

This summary highlights information contained elsewhere in this 2019 Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire 2019 Proxy Statement carefully before voting. Questions and Answers About the 2019 Annual Meeting and Voting can be found beginning on page 70.

Shareholder Voting Matters

For registered holders and employee savings plan participants:

(Shares are registered in your name with Dominion Energy’s transfer agent or held in one of the company’s employee savings plans)

 

Electronically via the Internet* www.cesvote.com		By telephone within the U.S.* (888) 693-8683		By mail using the proxy card/voting instruction form

 

 

For beneficial owners:

(Shares are held in a stock brokerage account or by a bank or other holder of record)

Electronically via the Internet* www.proxyvote.com		Refer to voting instruction form		Refer to voting instruction form

 

*	You will need your control number that appears on the Notice or proxy card/voting instructions.

2018 Business Highlights

Our Board of Directors

The Dominion Energy Board embodies a diverse range of viewpoints, backgrounds and skills that are vital to its effectiveness.

Dominion Energy supports the initiative of the U.S. 30% Club to achieve 30% female directors on S&P 100 boards by 2020.

The graphs below provide an overview of the collective experience, qualifications and attributes of the Board. See page 17 for individual details for each director.

Our Director Nominees

You are being asked to vote on the election of the following 13 director nominees. Detailed information about each director’s background, key experience and qualifications can be found beginning on page 8.

CGN = Compensation, Governance and Nominating; FROC = Finance and Risk Oversight; SCR = Sustainability and Corporate Responsibility

Sustainability and Corporate Responsibility

Our company has embraced the opportunity to operate more sustainably in everything we do for our customers, communities, investors and others. We have already seen great results from the challenges we set for ourselves in 2018 and are committed to continuing to do the same in 2019. To move this vision forward, the Board of Directors established a Sustainability and Corporate Responsibility Committee in late 2018, to provide oversight of our performance on environmental, social and governance (ESG) matters.

Our Five Core Values

Safety

Ethics

Excellence

Embrace Change

One Dominion Energy

Safety is our highest priority—in the workplace and in the community. The work we do can be dangerous. So our first and fundamental goal is to send every employee home safe and sound, every day. That is the only acceptable standard of performance.

Integrity, individual responsibility and accountability go hand-in-hand with bottom-line results. We cannot and will not take shortcuts to achieve our goals and fulfill our obligations to stakeholders. Ethical behavior matters, and our reputation depends on it.

We set high performance standards and are committed to continuous improvement in all areas of our business. The odds of long-term success improve when we go beyond “good” and strive for “great.” Our aim is not to be the biggest energy company, just the best.

Transformation and growth are the keys to long-term prosperity. A culture of receptivity to change and ardor for innovation propels our company forward, ensuring that our stakeholders will continue to flourish and that our best days still lie ahead.

It’s about teamwork. It is a unifying outlook that transcends organizational boundaries and focuses on our shared mission and purpose. We know that strong, sustainable performance depends on how well we support one another in executing our business plan.

Each of these values plays an integral role in sustainability—by safeguarding the health and welfare of our employees and communities, the bond of trust between Dominion Energy and others, the company’s adaptability to new circumstances and the standard of execution necessary to ensure the well-being of all our stakeholders, today and long into the future.

Corporate Governance Highlights

Strong corporate governance practices help further our efforts to achieve our performance goals while maintaining the trust and confidence of our shareholders, employees, customers and other stakeholders. Our corporate governance practices are described in more detail beginning on page 15 and in our Corporate Governance Guidelines, which can be found at www.dominionenergy.com/about-us/who-we-are/governance/governance-guidelines.

Item 1 – Election of Directors

Our Board of Directors has nominated 13 directors for election at the 2019 Annual Meeting to hold office until the next annual meeting or until their respective successors have been duly elected or appointed and qualified. All of the nominees are currently directors, and all but two (Messrs. Bennett and Hagood) were elected by shareholders at the 2018 Annual Meeting. Messrs. Bennett and Hagood were each elected in February 2019 by the Board to serve as a director upon the recommendation of Dominion Energy’s management and the CGN Committee in accordance with the terms of the merger agreement with SCANA. Each nominee has agreed to be named in this proxy statement and to serve as director for another term, if elected.

All of our directors are elected annually by a majority of votes cast unless there is a contested election, in which case the election is by plurality vote. In an uncontested election, a director who does not receive a majority of votes cast will submit a letter of resignation promptly to the Board. Upon advice from our CGN Committee, the Board will determine, within 90 days following certification of the results, whether or not to accept such resignation.

Our Board selected the 13 nominees based on their diverse mix of skills, experiences and perspectives. They are able to provide quality advice and counsel to Dominion Energy’s management and to effectively oversee the business and long-term interests of shareholders. These nominees bring to the Board a wide array of business and professional skills, as well as industry expertise. They are collegial, thoughtful, responsible and intelligent leaders who are also diverse in terms of age, gender, ethnicity, professional experience and geographic location. Many of the nominees serve or have served on other public company boards, enabling our Board to stay apprised of best practices implemented at other companies and promoting informed and effective governance. Since 2013, the Board has added seven new directors, bringing industry experience, insights, new perspectives and diversity that complement the attributes, skills and experience of the current Board members at the time of each of those additions.

Information about each director nominee is presented below including specific key experience and qualifications that led the CGN Committee and our Board to nominate him or her to serve as a director.

James A. Bennett

ITEM 1 — ELECTION OF DIRECTORS

Helen E. Dragas

Admiral James O. Ellis, Jr.

ITEM 1 — ELECTION OF DIRECTORS

Thomas F. Farrell, II

D. Maybank Hagood

ITEM 1 — ELECTION OF DIRECTORS

John W. Harris

Ronald W. Jibson

ITEM 1 — ELECTION OF DIRECTORS

Mark J. Kington

Joseph M. Rigby

ITEM 1 — ELECTION OF DIRECTORS

Pamela J. Royal, M.D.

Robert H. Spilman, Jr.

ITEM 1 — ELECTION OF DIRECTORS

Susan N. Story

Michael E. Szymanczyk

Corporate Governance

Refreshing the Board and Nominating Directors

CORPORATE GOVERNANCE

The CGN Committee recognizes that a Board with diverse skills, experiences and perspectives helps encourage critical thinking and innovative, strategic discussions, which in turn contribute to the continued success of the company. In evaluating a director candidate, the CGN Committee considers, among other things:

Once a potential candidate has been identified, the CGN Committee reviews the background of the candidate for potential conflicts and to determine whether the candidate would be independent under the independence standards of Dominion Energy and the New York Stock Exchange (NYSE). The Board then typically meets with the candidates in small and large groups of directors and in informal and formal settings to allow for personal interaction and assessment. Both the CGN Committee and the Board meet in executive session to discuss the qualifications of the director candidate before the CGN Committee makes a final recommendation to the Board.

When considering director candidates and the current and future composition of the Board, the CGN Committee and the Board consider how each candidate’s background, experiences, skills and/or prior board and committee service will contribute to and complement the existing Board.

Refreshment and Board Diversity

CORPORATE GOVERNANCE

DIRECTOR ATTRIBUTES AND EXPERIENCE

The Board seeks a mix of directors with qualities that result in a well-rounded, diverse Board that thinks critically and also functions effectively by reaching informed decisions. Our directors have a diversity of experience and a variety of skills, education, qualifications and viewpoints that strengthen the Board’s ability to carry out its oversight role of the company.

The table below is a summary of the range of attributes and experiences that each director brings to our Board. Because it is a summary, it is not intended to be a complete description of all of the skills and attributes that each of our Board members possesses.

Additional information about each director’s background, business experience and other matters, as well as a description of how each individual’s experience qualifies him or her to serve as a director of the company is provided under the heading Item 1—Election of Directors beginning on page 8.

Age

58

57

71

64

57

71

65

59

62

56

62

59

70

Tenure (years)

0

8

5

14

0

19

2

13

2

6

9

2

6

Gender

M

F

M

M

M

M

M

M

M

F

M

F

M

Leadership

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Corporate Governance

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Risk Oversight and Management

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Government, Public Policy or Legal

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Human Capital/Talent Management

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Innovation and Technology

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Environmental

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Customer Satisfaction and/or Service

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SHAREHOLDER-NOMINATED DIRECTOR CANDIDATES

Dominion Energy’s Bylaws allow a shareholder, or a group of up to 20 shareholders, owning collectively 3% or more of the company’s outstanding common stock continuously for at least the previous three years, to nominate and include in the company’s proxy materials director nominees constituting up to the greater of 20% of the Board or two nominees provided that such shareholder(s) and nominee(s) satisfy the requirements set forth in the Bylaws. For additional information, see Shareholder Director Nominations for Inclusion in the 2020 Proxy Statement on page 77.

CORPORATE GOVERNANCE

Board and Committee Evaluations

Director Independence

Our Corporate Governance Guidelines and the NYSE listing standards require that the Board be composed of a majority of independent directors. To assist in assessing director independence, the Board has adopted independence standards that also meet the independence requirements of the NYSE listing standards. In applying our independence standards and applicable Securities and Exchange Commission (SEC) and NYSE criteria, the Board considers all relevant facts and circumstances.

Our independence analysis also identifies certain types of commercial and charitable relationships that are immaterial and, therefore, do not affect a director’s independence. As such, these categorical relationships are not considered by the Board when determining independence, though they are reported to the CGN Committee annually. The Board may determine that a director is independent even if that director has a relationship that does not fit within these categorical standards, provided that the relationship does not violate our independence standards or NYSE independence standards. If such a determination is made, the basis for the Board’s determination will be explained in the company’s next proxy statement. Our independence standards are included in the appendix to our Corporate Governance Guidelines, which can be found at www.dominionenergy.com/about-us/who-we-are/governance/governance-guidelines.

CORPORATE GOVERNANCE

Based on the NYSE’s and Dominion Energy’s independence standards, and taking into account all relevant facts and circumstances, the Board determined that the following directors are independent: Messrs. Bennett, Ellis, Hagood, Harris, Jibson, Kington, Rigby, Spilman and Szymanczyk, Dr. Royal, and Mses. Dragas and Story. The Board determined that Mr. Farrell is not independent because he currently serves as our President and CEO.

In determining the independence of Mr. Jibson, the CGN Committee considered Mr. Jibson’s former employment as Chairman, President and CEO of Questar through September 2016, before the merger of Questar with Dominion Energy. Mr. Jibson receives no additional benefits from Dominion Energy except for those he receives for his previous service as an employee of Questar. The CGN Committee also considered the employment of Mr. Jibson’s adult, financially independent son by Dominion Energy during 2018. Mr. Jibson’s son is employed as a manager of joint operations and regulatory affairs with a subsidiary of Dominion Energy and is not an executive officer of Dominion Energy or any of its subsidiaries. The CGN Committee recommended and the Board concurred that Mr. Jibson’s employment by Questar prior to the merger with Dominion Energy and the employment of Mr. Jibson’s son do not affect Mr. Jibson’s independence.

Additional Independence Requirements for the Audit Committee and CGN Committee members. Our Audit Committee and CGN Committee charters contain additional independence requirements for each committee’s members. Our Audit Committee charter prohibits committee members from receiving any compensation from Dominion Energy except in their capacity as a director or committee member, or as permitted by SEC rules with respect to fixed amounts of compensation under a retirement plan for prior services. Our CGN Committee charter specifies that all members of the committee must meet the non-employee director requirements prescribed by SEC rules and, for purposes of administering any grandfathered performance-based awards under our executive compensation programs, the outside director requirements under Section 162(m) of the Internal Revenue Code (the Code).

Board and Committee Governance

OUR CORPORATE GOVERNANCE GUIDELINES

The Board is charged with the responsibility of overseeing the company’s management as well as the business and affairs of Dominion Energy on behalf of its shareholders. The Board and management also recognize that the interests of Dominion Energy are advanced by responsibly addressing the concerns of other constituencies, including employees, customers and the communities where Dominion Energy operates. Dominion Energy’s Corporate Governance Guidelines are intended to support the Board in its oversight role and in fulfilling its obligation to shareholders.

Our Corporate Governance Guidelines address, among other things:

Our Corporate Governance Guidelines can be found at www.dominionenergy.com/about-us/who-we-are/governance/governance-guidelines.

OUR BOARD LEADERSHIP STRUCTURE

Our Board leadership is currently structured with a Chairman (who is also our CEO), an independent Lead Director, and independent committee chairs. Our Corporate Governance Guidelines provide that the Board will determine whether to have a joint CEO and Chairman position or to separate these offices, taking into consideration succession planning, the skills and experience of the individual or individuals filling these positions and other relevant factors. The Board believes that the most effective leadership structure for Dominion Energy at

CORPORATE GOVERNANCE

this time is having Mr. Farrell serve as both CEO and Chairman of the Board, but considers the appropriateness of this structure at least annually. A combined CEO and Chairman role promotes unified leadership and direction for the company, and assists in effective execution of the company’s strategy and business plans. The Board believes Mr. Farrell provides the necessary experience and skills to lead the company in addressing (i) the energy demands of the communities where Dominion Energy does business, (ii) financial and economic issues, and (iii) current and future environmental and regulatory challenges. The Board also believes that Mr. Farrell’s insight and understanding of the material risks inherent to our business allow him to identify and raise key risks to the Board. His role as Chairman ensures that the Board and its standing committees give attention to areas of concern.

The Board believes there is no single best leadership structure that is the most effective in all circumstances and may decide to separate the positions of CEO and Chairman in the future if it deems it appropriate and in the best interests of the company and its shareholders. The Board has also adopted governance policies and practices to ensure a strong and independent Board that provides balance to the combined CEO and Chairman position, including:

ROLE OF THE LEAD DIRECTOR

The duties and responsibilities of our independent Lead Director include:

The Lead Director also leads the evaluation of the performance of our CEO, oversees the Board’s annual self-assessment, encourages and facilitates active participation by all directors, and monitors and coordinates with management on corporate governance issues and developments. The Board believes that designating a Lead Director and having a majority of independent directors provides an effective counterbalance to the combined Chairman and CEO role.

Board members also have complete and open access to management, as well as our independent auditor and the CGN Committee’s independent compensation consultant.

ROLE OF THE BOARD – OVERSIGHT OF STRATEGY AND RISK

Oversight of Strategy

Dominion Energy is operating in an environment of rapid change. Shifting market fundamentals, technological advances, environmental imperatives and changing customer preferences are reshaping our operations and asset portfolio. These shifts require significant Board engagement on strategy. The Board recognizes that the true measure of its stewardship is an effective long-term growth strategy that addresses the interests of shareholders and other constituencies, including customers, employees, suppliers, our neighbors in the communities we serve and the environment.

CORPORATE GOVERNANCE

Given the iterative nature of strategy development, the Board’s oversight of strategy is continuous and embedded in its governance activities throughout the year, including:

Two key areas of responsibility that support the Board’s strategic role are its oversight of risk management and the company’s sustainability initiatives.

Oversight of Risk Management

The company and the utility industry itself continue to face uncertainty posed by external forces, and the interactions among risks are becoming increasingly complex. Accordingly, appropriate enterprise risk management (ERM) processes are embedded in all critical business processes and are intended to help the company nimbly respond to changes in the business environment. The Board has implemented a risk governance framework designed to help the directors:

The ERM program is designed to identify operational, financial, strategic, compliance and reputational risks that could adversely affect the execution of the company’s plans or effectiveness of its business model (or, conversely, facilitate new growth opportunities). ERM processes are used to assess the likelihood and potential impact of these risks and develop strategies to mitigate or manage such risks within the company’s risk appetite.

As provided under our Corporate Governance Guidelines and committee charters, the Board, the Audit Committee and the Finance and Risk Oversight Committee each regularly receive and discuss reports from the Chief Risk Officer and other members of management who are involved in risk management functions. In addition, the CGN Committee reviews with management an annual assessment of the overall structure of the company’s compensation program and policies to ensure consistency with the company’s risk management objectives.

To learn more about risks facing the company, you can review the factors included in Part I, “Item 1A. Risk Factors” in the 2018 Annual Report on Form 10-K. The risks described in the Form 10-K are not the only risks facing the company. Additional risks and uncertainties also may materially adversely affect the company’s business, financial condition or results of operations in future periods.

COMMITMENT TO SUSTAINABILITY AND CORPORATE RESPONSIBILITY

Dominion Energy is shaping the future of energy in America – while delivering sustainable, long-term growth to our shareholders. Doing so in the face of a rapidly changing landscape of technology, regulation and stakeholder expectations requires that we meet the needs of multiple stakeholders – our investors, customers, employees, communities and many more. We are embracing change and operating more sustainably than ever before, and have committed to further reduce our impact on the environment by reducing carbon intensity by 60% from 2000 levels and methane intensity by 50% from 2010 levels by 2030. We are focused on the safety, development and engagement of our employees and are committed to maintaining a diverse and inclusive workplace. Dominion Energy is also enhancing our disclosures and seeking new opportunities to engage with our communities.

CORPORATE GOVERNANCE

These matters are a priority for our Board, which recognizes that its oversight of ESG matters is of increasing interest to our investors and other stakeholders. To enhance its oversight of the company’s performance as a responsible corporate citizen, the Board formed the Sustainability and Corporate Responsibility Committee, which is composed entirely of independent directors and reviews Dominion Energy’s approach to environmental, social, economic and reputational matters that affect the company’s business and performance as well as our communities and stakeholder groups.

Under the watch of the Board and the Sustainability and Corporate Responsibility Committee, in December 2018, the company published its 2017-2018 Sustainability and Corporate Responsibility Report, which sets forth our most material ESG priorities, our performance in these areas and targets for further improvement:

CORPORATE GOVERNANCE

INVESTOR ENGAGEMENT

Our relationship with our shareholders is an important part of our success, and we have a long tradition of engaging with our shareholders and obtaining their perspectives. Our management engages with shareholders on a variety of topics throughout the year to solicit input, answer questions and provide perspective on the company’s policies and practices. These engagements typically cover governance, compensation, environmental, sustainability, and other current and emerging issues that are important to our shareholders. Investor feedback from these engagements is considered by management, provided to the Board on a regular basis and reflected in enhancements to policies and practices, as appropriate. During 2018, our integrated outreach team led by our Corporate Secretary, Sustainability and Investor Relations teams reached out to investors representing approximately 50% of our outstanding shares and discussed a wide variety of issues. We believe that our approach to engaging openly with our investors on topics such as corporate governance, executive compensation, environmental, sustainability, and other current and emerging issues that are viewed important by our shareholders provides increased accountability and transparency and ultimately drives long-term value.

2018 MEETINGS AND ATTENDANCE

As outlined in our Corporate Governance Guidelines, directors are expected to attend all Board and committee meetings. The Board met 10 times in 2018. Each director serving in 2018 attended at least 75% of all Board meetings and the respective meetings of the committees on which he or she served. All of our directors then serving attended the 2018 Annual Meeting.

MEETINGS OF INDEPENDENT DIRECTORS

Executive sessions of our non-management, independent directors are held at each regularly scheduled Board meeting and are presided over by our Lead Director.

THE COMMITTEES OF THE BOARD

The Board has four standing committees, described below. The Board has adopted charters for each of these committees, which can be found at www.dominionenergy.com/about-us/who-we-are/governance/ board-committees-and-charters.

CORPORATE GOVERNANCE

The principal role, independence standards and number of meetings held during 2018 of each committee are outlined below.

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

Compensation of Non-Employee Directors

In accordance with our Corporate Governance Guidelines, the CGN Committee annually reviews and assesses the compensation paid to non-employee directors but, depending on the market data and the company’s needs, the CGN Committee may recommend changes less frequently. Any changes proposed by the CGN Committee must be approved by the Board. The Board believes that its compensation should be aligned with the interests of the shareholders; therefore, a significant portion of Dominion Energy’s director compensation is paid in Dominion Energy common stock. From time to time, the CGN Committee will discuss trends in director compensation with its independent compensation consultant.

Effective May 9, 2018, the components of non-employee director compensation are as follows:

The following table and footnotes reflect the compensation and fees received in 2018 by our non-employee directors for their services. Mr. Farrell does not receive any separate compensation for his service as a director.

CORPORATE GOVERNANCE

EXPENSE REIMBURSEMENTS

We pay and/or reimburse directors for travel, lodging and related expenses they incur in attending Board and committee meetings and for other business-related travel. These reimbursements include the expenses incurred by directors’ spouses in accompanying the directors to two Board meetings each year. In addition, directors and their spouses may accompany the CEO or other senior executives on the corporate aircraft for both business and personal travel. We do not provide tax gross-ups on any imputed income for the directors.

DIRECTOR COMPENSATION PLANS

Non-Employee Directors Compensation Plan

Our non-employee directors are paid their annual retainers and meeting fees under this plan. A director may elect to receive all or a portion of his or her meeting fees in the form of cash or stock. If a director does not make an election, meeting fees are paid in cash. This plan also allows directors to defer all or a portion of their annual cash retainer and meeting fees into stock unit or cash accounts and all or a portion of their annual stock retainer into stock unit accounts. Stock unit accounts are credited quarterly with additional stock units equal in value to dividends paid on Dominion Energy common stock, and cash accounts are credited monthly with interest at an annual rate established for the Dominion Energy Fixed Rate Fund (which was 3.63% in 2018) under Dominion Energy’s frozen Executive Deferred Compensation Plan. Shares of Dominion Energy common stock equal in value to stock units held for directors under this plan are issued into a trust and directors retain all voting and other rights as shareholders. Distributions under this plan are made when a director ceases to serve on the Board. For a director who has served at least five years, he or she will be granted 1,000 shares of Dominion Energy common stock upon departure from the Board. If that director also served as a committee chair or Lead Director in the year preceding the year of departure, he or she will be granted an additional 1,000 shares of Dominion Energy common stock for each such position held upon departure from the Board. In addition, this plan provides a means for the Board to receive grants of restricted stock awards and stock options. However, no stock options or restricted stock have been granted under this plan.

Frozen Director Plans

On December 31, 2004, the Board froze the following director plans: Stock Compensation Plan and Stock Accumulation Plan (described in footnote (3) under the Compensation of Non-Employee Directors table on page 26). These plans provided a means to compensate directors and allowed directors to defer receipt of that compensation, whether in cash or stock, until they ceased to be directors or reached a specified age. Under the frozen plans, dividend equivalents continue to accrue and may be held in trust until distributions are made. Prior to 2005, the stock portion of a director’s retainer was paid under the Stock Compensation Plan, and directors had the option to defer receipt of that stock.

OTHER DIRECTOR BENEFITS

Charitable Contribution Program

This program was discontinued in January 2000. For directors elected before that time, Dominion Energy funded the program by purchasing life insurance policies on the directors. The one participating director (Mr. Harris) will derive no financial or tax benefits from the program because all insurance proceeds and charitable tax deductions accrue solely to Dominion Energy. Upon a participating director’s death, $500,000 will be paid in 10 annual installments to the qualifying charitable organization(s) designated by that director.

Matching Gifts Program

Dominion Energy’s philanthropic arm, the Dominion Energy Charitable Foundation, will match a director’s donations, on a one-to-one basis, to one or more 501(c)(3) organizations up to a maximum of $5,000 per year. If the donation is to an organization on whose board the director serves or for which the director volunteers more than 50 hours of work during a year, the Dominion Energy Charitable Foundation will match the donation on a two-to-one basis, up to the $5,000 maximum. This benefit is also available to all Dominion Energy employees.

CORPORATE GOVERNANCE

Securities Ownership

All non-employee directors are expected to acquire and hold the lesser of 12,000 shares of Dominion Energy common stock or an amount of shares equal in value to five times the annual cash and stock retainer combined within four years of their election to the Board. Our CEO is expected to hold the lesser of 145,000 shares or shares with a value of eight times his salary, and executive vice presidents are expected to hold the lesser of 35,000 shares or shares with a value of five times their salary. All of our non-employee directors who have been members of the Board for at least four years, our CEO and our executive officers who have been executive officers for at least two years meet their share ownership requirements. Our directors and executive officers are also prohibited from engaging in certain types of transactions related to Dominion Energy common stock, including owning derivative securities, hedging transactions, using margin accounts and pledging shares as collateral.

The following table sets forth, as of March 1, 2019, the number of shares of our common stock beneficially owned by each of our directors, NEOs, and by all directors and executive officers as a group.

DIRECTOR AND OFFICER BENEFICIAL OWNERSHIP

CORPORATE GOVERNANCE

SIGNIFICANT SHAREHOLDERS

Audit-Related Matters

Audit Committee Report

Our Committee is responsible for assisting the Board in fulfilling its responsibility for oversight of the quality and integrity of Dominion Energy’s accounting, auditing and financial reporting practices. Our Committee operates under a written charter that is reviewed annually and can be found at www.dominionenergy.com/about-us/who-we-are/governance/board-committees-and-charters.

Management is responsible for Dominion Energy’s financial statements and internal controls over financial reporting. Throughout 2018, our Committee met with the internal and independent auditors, with and without management present, to discuss the plans for, and scope and results of, their audits and reviews of Dominion Energy’s financial statements and internal controls over financial reporting, and the overall quality of Dominion Energy’s financial reporting. At three of the Committee’s meetings, we also met with the internal auditors, independent auditors and management in separate executive sessions.

Management has represented that Dominion Energy’s consolidated financial statements were prepared in accordance with Generally Accepted Accounting Principles (GAAP). We reviewed and discussed the audited consolidated financial statements with management and the independent auditors. In accordance with the requirements established under AS 1301 (Communications with Audit Committees), as adopted by the Public Company Accounting Oversight Board (United States) (PCAOB) and approved by the SEC, this discussion included a review of significant accounting policies, critical accounting policies and estimates, and the quality of Dominion Energy’s accounting principles.

We have received written disclosures and letters from the independent auditors required by both the applicable requirements of the PCAOB regarding the independent auditors’ communications with the Committee concerning independence and the NYSE governance standards regarding internal quality-control procedures. We have discussed with the independent auditors the issue of their independence from Dominion Energy, including any non-audit services performed by them.

2018 CONSOLIDATED FINANCIAL STATEMENTS

Relying on these reviews and discussions, we recommended to the Board, and the Board approved, the inclusion of the audited financial statements and management’s annual report on internal control over financial reporting in Dominion Energy’s Annual Report on Form 10-K for the year ended December 31, 2018, for filing with the SEC.

INDEPENDENT AUDITORS FOR 2019

Our Committee discussed with management and reviewed with the independent auditors their plans and proposed fees for auditing the 2019 consolidated financial statements and internal controls over financial reporting of Dominion Energy and its subsidiaries, as well as their proposed audit-related services and fees. Based on our discussions and review of the proposed fee schedule, we have retained Deloitte & Touche LLP, a registered public accounting firm that is independent of Dominion Energy, as Dominion Energy’s independent auditor for 2019 and in accordance with our pre-approval policy, approved the fees for the services presented to us. Permission for any non-audit related services will require prior approval by our Committee or our Chair.

Robert H. Spilman, Jr., Chair

Joseph M. Rigby

Pamela J. Royal, M.D.

Susan N. Story

Michael E. Szymanczyk

AUDIT-RELATED MATTERS

Auditor Fees and Pre-Approval Policy

The Audit Committee has a pre-approval policy for Deloitte & Touche LLP’s services and fees. Each year, the Audit Committee pre-approves a schedule that details the services to be provided for the following year and an estimated charge for such services. The Audit Committee approved the schedule of services and fees for 2019. In accordance with Dominion Energy’s pre-approval policy, any changes to the schedule may be approved by the Audit Committee at its next meeting.

The following table presents fees paid to Deloitte & Touche LLP for the fiscal years ended December 31, 2018 and 2017, all of which were pre-approved by the Audit Committee.

Representatives of Deloitte & Touche LLP will be present at the 2019 Annual Meeting. They will have an opportunity to make a statement if they desire, and will be available to respond to appropriate shareholder questions.

Item 2 – Ratification of Appointment of Independent Auditor

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent external audit firm retained to audit the company’s financial statements. The Audit Committee has appointed Deloitte & Touche LLP as the company’s independent external auditor for the fiscal year 2019. Deloitte & Touche LLP has served as Dominion Energy’s independent external auditor continuously since 1988. The Audit Committee is responsible for the audit fee negotiations associated with the retention of Deloitte & Touche LLP. In order to ensure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent external audit firm. Further, in conjunction with the mandated rotation of the auditing firm’s lead engagement partner, the Audit Committee and its chairperson will continue to be directly involved in the selection of Deloitte & Touche LLP’s new lead engagement partner. The members of the Audit Committee and the Board believe that the continued retention of Deloitte & Touche LLP to serve as the company’s independent external auditor is in the best interests of Dominion Energy and its shareholders.

The Board has determined that it would be desirable to request an expression of opinion from the shareholders on the appointment of Deloitte & Touche LLP. If the shareholders do not ratify the selection of Deloitte & Touche LLP, the selection of the independent external auditor will be reconsidered by the Audit Committee.

Executive Compensation

Compensation, Governance and Nominating Committee Report

In preparation for filing this Proxy Statement, the CGN Committee reviewed and discussed the following Compensation Discussion and Analysis (CD&A) with management. Based on this review and discussion, we recommended to the Board of Directors that the CD&A be included in this Proxy Statement and incorporated by reference into Dominion Energy’s Annual Report on Form 10-K for the year ended December 31, 2018. This report was prepared by the following independent directors who compose the CGN Committee:

John W. Harris, Chair

Helen E. Dragas

Mark J. Kington

Robert H. Spilman, Jr.

Compensation Discussion and Analysis

EXECUTIVE SUMMARY

Our executive compensation program supports our business goals by rewarding performance that serves our customers and creates shareholder value. This CD&A focuses on the compensation for our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) as well as our three other most highly compensated executive officers serving at the end of the year. Collectively, these officers are referred to as the named executive officers (NEOs).

Dominion Energy’s NEOs for 2018 were:

PAY-FOR-PERFORMANCE HIGHLIGHTS

Our pay-for-performance program:

We believe that our executive compensation program contributes to our long-term strategy by aligning the interests of our executive officers with the interests of our shareholders, customers and other stakeholders.

EXECUTIVE COMPENSATION

SHAREHOLDER OUTREACH AND SAY ON PAY

Dominion Energy has a long tradition of engaging with shareholders and obtaining their perspectives. The feedback our shareholders have provided over time has greatly informed our executive compensation, governance, environmental and sustainability programs. Our shareholders voted on an advisory basis on our executive compensation program (also known as Say on Pay) and approved it with a 94.1% vote at the 2018 Annual Meeting, which followed an approval by a 93.5% vote in 2017. The CGN Committee considered the very strong shareholder endorsement of our executive compensation program in continuing the pay-for-performance program that is currently in place without any specific changes based on the vote. Unless the Board modifies its policy on the frequency of future Say on Pay advisory votes, shareholders will have an opportunity annually to cast an advisory vote to approve our executive compensation program. We will ask shareholders, on an advisory basis, to vote on the frequency of the Say on Pay vote at least once every six years, with the next advisory vote on frequency to be held no later than the 2023 Annual Meeting.

GUIDE TO COMPENSATION DISCUSSION & ANALYSIS

EXECUTIVE COMPENSATION

Our Performance

In 2018, Dominion Energy set the stage for strategic growth by pursuing the SCANA combination which closed on January 1, 2019. The $13.4 billion merger significantly grew our presence in the southeast U.S. markets by adding approximately 2 million electric power and natural gas customer accounts. As a result of the merger, we now deliver energy to approximately 7.5 million customer accounts, have an electric generating portfolio of about 32,000 megawatts, 95,000 miles of electric transmission and distribution lines, a natural gas pipeline network totaling 108,800 miles and operate one of the nation’s largest natural gas storage systems with 1 trillion cubic feet of capacity. We successfully executed several major initiatives that support our earnings and credit objectives including merchant asset sales, approximately $8 billion of parent-level debt reduction, the merger with Dominion Energy Midstream, and the commercial in-service of the $4.1 billion Cove Point liquefaction project and the $1.3 billion Greensville Power Station – all while simultaneously achieving company-wide safety records.

EXECUTIVE COMPENSATION

Total Shareholder Return

Business Highlights

EXECUTIVE COMPENSATION

Many of these accomplishments directly or indirectly affected payouts and overall compensation as noted under Our Philosophy and Our Compensation Elements.

Our Philosophy

We apply pay-for-performance principles to provide a competitive total compensation program tied to results that align with the interests of our shareholders, executive officers and customers. The major objectives of our executive compensation program are to:

To determine if we are meeting these objectives, the CGN Committee compares the company’s actual performance to our short-term and long-term goals and to our peer companies’ performance.

EXECUTIVE COMPENSATION

Individual Factors in Setting Compensation

Variable Compensation Opportunities in 2018

Consistent with our objective to reward strong performance based on achievement of short-term and long-term goals, a significant portion of total cash and total direct compensation is variable. Approximately 90% of Mr. Farrell’s targeted 2018 total direct compensation was performance-based; tied to pre-approved performance metrics, including relative and absolute TSR, price-earnings ratio, and return on invested capital (ROIC); or tied to the performance of our stock. For the other NEOs, performance-based and stock-based compensation ranged from 62% to 81% of targeted 2018 total direct compensation.

The charts below illustrate the components of the target total direct compensation opportunities provided to our CEO and the other NEOs.

EXECUTIVE COMPENSATION

Our Compensation Elements

Our executive compensation program is constructed of four building blocks: base salary, annual incentive plan, long-term incentive program and executive benefits. Each element serves a distinct purpose. These complementary components appropriately balance risk with reward and short-term goals with long-term strategies, while providing total compensation that is competitive with our peers.

Base Salary

Competitive base pay is necessary to attract, motivate and retain talent. For our NEOs, base salaries are generally targeted at or above the Compensation Peer Group median, subject to the individual and company-wide considerations discussed under Our Philosophy.

The CGN Committee did not increase Mr. Farrell’s base salary for 2018, with a decision to focus any increases on performance-based components of compensation. The CGN Committee approved the following base salary increases, effective March 1, 2018: Mr. McGettrick, 3%; Mr. Koonce, 5%; Ms. Leopold, 10%; and Mr. Blue, 10%, recognizing all their continued contributions to Dominion Energy’s success and, relative to Ms. Leopold and Mr. Blue, the CGN Committee’s continued assessment of their 2017 promotions to business unit heads and the associated additional responsibilities. Effective November 1, 2018, the CGN Committee approved a 50% base salary increase for Mr. Chapman, recognizing his promotion to CFO and resulting significantly expanded responsibilities.

Annual Incentive Plan

The AIP is a cash-based program focused on short-term goals and is designed to:

For the NEOs, funding of the 2018 AIP was tied solely to achievement of predetermined earnings per share goals. However, the CGN Committee retained discretion to reduce the AIP payout for any NEO for any reason, including missed business unit financial targets or failure to satisfy operating and stewardship goals.

The CGN Committee calculated 2018 AIP payouts for the NEOs as follows:

EXECUTIVE COMPENSATION

Target Award Percentage

Each NEO’s compensation opportunity under the AIP is a percentage of his or her base salary. AIP target award percentages are set to be consistent with our intent to keep a significant portion of NEO compensation at risk, taking into account the items described above under Our Philosophy. There were no changes to AIP target award percentages from 2017 to 2018 for Messrs. Koonce and Blue or Ms. Leopold. Messrs. Farrell’s and McGettrick’s AIP target award percentages increased from 125% to 140% and 100% to 110%, respectively, reflecting the CGN Committee’s decision to place increased emphasis on performance-based compensation for its senior-most management team. Mr. Chapman’s AIP target award percentage increased from 50% to 90% to reflect his promotion and increased responsibilities as CFO.

Funding Level

For NEOs, the AIP funding level is determined solely by our consolidated operating earnings per share, which are our reported earnings determined in accordance with GAAP, adjusted for certain items. We believe that by focusing on pre-established consolidated operating EPS targets, we encourage behavior and performance that will help achieve these objectives.

For the NEOs, the CGN Committee set the consolidated operating EPS goal to provide for 100% funding of the 2018 AIP at $3.85 per share, inclusive of funding. The target for maximum funding of 200% was set at $4.10 operating EPS. The CGN Committee established a funding floor, providing 50% funding if operating earnings were at $3.60 per share and no funding if less than $3.60 per share.

Dominion Energy’s consolidated reported earnings in accordance with GAAP for the year ended December 31, 2018 were $2.4 billion or $3.74 per share, and Dominion Energy’s consolidated operating earnings for the year ended December 31, 2018 were $2.7 billion or $4.05 per share*, which surpassed the target of $3.85. In order to fund the NEOs’ AIP payouts consistent with all other AIP plan participants, the CGN Committee exercised negative discretion and approved a funding percentage of 120%.

Payout Goal Score

In determining whether and how to exercise its negative discretion for AIP payout, the CGN Committee typically considers each NEO’s accomplishment of pre-determined business unit financial goals and operating and stewardship goals, weighted according to each NEO’s responsibilities. The CGN Committee approved 100% payout scores for Messrs. Farrell, Chapman, McGettrick, Koonce and Blue and exercised negative discretion to reduce the payout score of Ms. Leopold to 99.96% due to a missed operating and stewardship goal, as discussed below.

Messrs. Chapman, Koonce and Blue and Ms. Leopold carried discretionary business unit financial goals, with the CGN Committee having the ability to exercise negative discretion with respect to these goals if appropriate. Messrs. Chapman and Koonce, as officers of Dominion Energy Services and the Power Generation Group, respectively, achieved 100% of their discretionary business unit financial goals. Ms. Leopold and Mr. Blue were officers of the Gas Infrastructure Group and the Power Delivery Group, respectively. While these two business units did not accomplish 100% of their business unit financial goals, as permitted by the terms of and consistent with the design of the AIP, the CGN Committee did not exercise negative discretion to reduce their payout scores.

EXECUTIVE COMPENSATION

The CGN Committee noted that the Power Delivery Group would have achieved its goal but for the adverse weather and major storm events of 2018 and the Gas Infrastructure Group would have achieved its goal but for delays in the Cove Point liquefaction project’s in-service date and penalties related thereto and the ACP delays that prevented anticipated capital use.

Each business unit’s financial results are shown below:

Operating net income shown in millions. Actual 2018 Operating Net Income assuming 100% AIP funding.

Messrs. Farrell, Chapman and McGettrick each met their corporate-wide safety goals and Mr. Koonce, Mr. Blue and Ms. Leopold achieved their business unit safety goals.

Each NEO met his or her discretionary diversity goal, which related to diversity and inclusion training. Messrs. Farrell, Chapman, McGettrick, Koonce and Blue met their discretionary environmental goal, which related to environmental sustainability issues. Ms. Leopold did not fully achieve her environment goal due to one operating segment within her business unit missing its environmental stewardship/pollution prevention/corporate responsibility target due to permit delays.

Mr. Chapman also had discretionary operating and stewardship goals relating to the completion of Treasury sub-group goals and accomplishment of transition of key functions across Treasury and Mergers and Acquisitions. Mr. Chapman met each of these goals.

For Ms. Leopold, the CGN Committee determined 2018 payout goal scores as follows: