Edgar Filing: WEC ENERGY GROUP, INC.

Document

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 x

Filed by a Party other than the Registrant ¨

Check the appropriate box:


¨	Preliminary Proxy Statement


¨	Confidential, for use of the Commission Only (as permitted by Rule 14a-6(e)(2))


x	Definitive Proxy Statement


¨	Definitive Additional Materials


¨	Soliciting Material under §240.14a-12

WEC Energy Group, 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):


x	No fee required.


¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.



(1)	Title of each class of securities to which transaction applies:


(2)	Aggregate number of securities to which transaction applies:


(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):


(4)	Proposed maximum aggregate value of transaction:


(5)	Total fee paid:


¨	Fee paid previously with preliminary materials.


¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.



(1)	Amount Previously Paid:
(2)	Form, Schedule or Registration Statement No.:
(3)	Filing Party:
(4)	Date Filed:

This Page Intentionally Left Blank



WEC Energy Group	P-2	2019 Proxy Statement



WEC Energy Group	P-3	2019 Proxy Statement

Dear Fellow Stockholders,

On behalf of our Board of Directors, I want to thank you for your investment in WEC Energy Group. As we prepare for our 2019 Annual Meeting of Stockholders, I ask for your support of the three proposals presented in this proxy statement. As you review each of these matters, please consider the following highlights from 2018, all of which demonstrate our commitment to applying strong corporate governance principles, while actively engaging in oversight of the Company’s strategy, financial and operational performance, risk management, and executive leadership.

Strategy

Throughout 2018, the Board engaged in substantive discussions with management about WEC Energy Group's long-term strategy. Strategies must be evaluated in appropriate context, and in our case, we actively considered the many risks and opportunities facing the utility sector, including new technologies, customer preferences, commodity prices, energy resiliency efforts, climate change, cyber-security, and evolving shareholder engagement on environmental, social and governance initiatives.

Examples of strategic areas on which the Board provided critical oversight and input in 2018 include:


•	WEC Energy Group’s long-term goal to reduce carbon dioxide emissions by approximately 80 percent below 2005 levels by 2050;


•	Reshaping the Company’s generation fleet by balancing the need for energy resilience and fuel diversity with customer preferences and environmental objectives;


•	Investment in renewable energy projects that will add carbon-free resources to our generating fleet, and others that bolster our energy infrastructure segment;


•	Capital spending for projects centered on upgrading reliability, customer service, and information technology systems; and


•	Regulatory and legislative priorities at the state and federal levels, from tax reform to climate change.

Management Succession Planning

In October 2017, our Company’s then-CEO, Allen Leverett, suffered a stroke, following which the Board activated its executive succession plan. I stepped in as CEO during Mr. Leverett’s recovery. Having served in that role from 2004 to 2016, the Board felt confident that my understanding of the Company -- and its operations, employees and investors -- would provide strong continuity as the Company continued to execute its short- and long-term plans.

Management succession was a clear focus in 2018. After Mr. Leverett’s resignation as an officer of the Company, the Board appointed Kevin Fletcher, initially to serve as President of WEC Energy Group, followed by his transition into the added roles of CEO and a member of the Board of Directors, effective February 1, 2019. Mr. Fletcher has more than 40 years of experience in the energy industry, and the Board has the utmost confidence in his leadership capabilities. His deep experience in customer service and operations, combined with his previous responsibility for the operational and financial performance of all of the Company’s utility subsidiaries, will enable him to contribute valuable Company and industry insights as a member of the Board.



WEC Energy Group	P-4	2019 Proxy Statement

In addition to appointing Mr. Fletcher to his new roles, the Board also appointed me to the position of Executive Chairman, and approved the creation of the Office of the Chair, solidifying a strong and seasoned leadership team. The Board believes this structure is appropriate to continue the smooth transition in leadership following Mr. Leverett’s resignation as an active employee.

Financial and Operational Performance

By nearly every meaningful metric, 2018 was a record year for WEC Energy Group, and the Board was fully engaged in its oversight capacity throughout. Here are some results the Board believes are particularly noteworthy:


•	Record earnings from operations and solid dividend growth;


•	More cash returned to stockholders than any other year in Company history;


•	Recognition as “most reliable” electric utility in the region and number one in the country for customer satisfaction among key accounts;


•	Highest spending with diverse suppliers in Company history;


•	Closure of nearly 1,500 megawatts of older, less efficient, coal-fired generation, reducing operating and maintenance costs by approximately $50 million annually;


•	Increased dividend for 16th consecutive year (2004-2019); and


•	Eleven all-time trading highs for WEC common stock.

This exceptional performance links directly to the Company’s executive compensation structure and components, further demonstrating that our compensation program supports our annual and multi-year strategy. Our Board takes seriously its responsibility to ensure that executives truly are paid for performance in measurable, transparent, and meaningful ways.

Board Composition and Refreshment

The Board is able to carry out its fiduciary obligations to our stockholders because of the combined strength, diversity, and dedication of its individual members. Just as the Board focused considerable attention during 2018 on management succession, the Board continued to move forward with thoughtful refreshment.

Two new, independent directors joined our Board over the past 15 months. This provided a transition period as two highly experienced directors will complete their service on the Board at the 2019 Annual Meeting. We expect refreshment to continue, as five additional independent directors are scheduled to complete their service over the next two years.

We are committed to ensuring that the WEC Energy Group Board of Directors continues to be comprised of at least a two-thirds majority of independent directors, and that the Board as a whole remains significantly diverse, as it is today.

As always, on behalf of the Board, I invite your engagement and appreciate your support.

Gale E. Klappa

Executive Chairman



WEC Energy Group	P-5	2019 Proxy Statement

This Page Intentionally Left Blank



WEC Energy Group	P-6	2019 Proxy Statement

TABLE OF CONTENTS



P-8	Notice of the 2019 Annual Meeting of Stockholders
P-9	Proxy Summary
P-13	Proxy Statement
P-13	Proposal 1: Election of Directors-Terms Expiring in 2020
P-14	Director Nomination and Evaluation Process
P-14	Director Qualifications
P-15	Director Independence
P-16	2019 Director Nominees for Election
P-23	Governance
P-23	Stockholder Engagement
P-24	Corporate Governance Framework
P-25	Board Leadership
P-25	Risk Oversight
P-26	Environmental and Social Governance
P-27	Board and Committee Practices
P-29	Board Committees
P-31	Where to Find More Information on Governance
P-31	Communicating with the Board
P-32	Director Compensation
P-34	Proposal 2: Advisory Vote to Approve Compensation of the Named Executive Officers
P-35	Compensation Discussion and Analysis
P-35	Executive Summary
P-38	Components of Our Executive Compensation Program
P-40	Determination of Market Median
P-40	Determination of Messrs. Klappa's and Kuester's 2018 Compensation
P-40	Mr. Leverett's 2018 Compensation
P-41	Annual Base Salary
P-41	Annual Cash Incentive Compensation
P-45	Long-Term Incentive Compensation
P-49	Compensation Recoupment Policy
P-49	Stock Ownership Guidelines



P-49	Prohibition on Hedging and Pledging
P-49	Limited Trading Windows
P-50	Retirement Programs
P-50	Other Benefits, Including Perquisites
P-50	Tax Gross-Up Policy
P-51	Severance Benefits and Change in Control
P-51	Impact of Prior Compensation
P-51	Section 162(m) of the Internal Revenue Code
P-51	Compensation Committee Report
P-52	Executive Compensation Tables
P-52	Summary Compensation Table
P-55	Grants of Plan-Based Awards for 2018
P-56	Outstanding Equity Awards at Year-End 2018
P-57	Option Exercises and Stock Vested for 2018
P-58	Pension Benefits at Year-End 2018
P-59	Retirement Plans
P-61	Nonqualified Deferred Compensation for 2018
P-63	Potential Payments Upon Termination or Change in Control
P-68	Pay Ratio Disclosure
P-68	Risk Analysis of Compensation Policies and Practices
P-69	Proposal 3: Ratification of Deloitte & Touche LLP as Independent Auditors for 2019
P-70	Independent Auditors' Fees and Services
P-71	Audit and Oversight Committee Report
P-72	WEC Energy Group Common Stock Ownership
P-73	Section 16(a) Beneficial Ownership Reporting Compliance
P-73	Certain Relationships and Related Transactions
P-74	Information Related to the Annual Meeting
P-78	Availability of Form 10-K
P-79	Appendix A - Earnings and Earnings Per Share GAAP Reconciliation



WEC Energy Group	P-7	2019 Proxy Statement

Notice of 2019 Annual Meeting of Stockholders




We are pleased to invite you to join our Board of Directors and senior leadership at WEC Energy Group’s 2019 Annual Meeting of Stockholders. When and Where Thursday, May 2, 2019, 10:00 a.m., Central time Concordia University Wisconsin R. John Buuck Field House 12800 North Lake Shore Drive Mequon, WI 53097 Items of Business 1. Elect thirteen directors for terms expiring in 2020. 2. Provide advisory vote to approve compensation of the named executive officers. 3. Ratify Deloitte & Touche LLP as independent auditors for 2019. 4. Consider any other matters that may properly come before the meeting. Record Date The Board of Directors set February 21, 2019 as the record date for the meeting. This means that our stockholders as of the close of business on that date are entitled to receive this notice of the meeting and to vote at the meeting. On the record date, there were 315,450,338 shares of common stock of WEC Energy Group, Inc. issued and outstanding and entitled to vote at the meeting. Meeting Attendance Information If you plan to attend the Annual Meeting in person, you must pre-register and present photo identification at the door. See page P-76 for information about the location, format, and how to register to attend the meeting. Regardless of whether you plan to attend, please take a moment to vote your Proxy. If you are unable to attend, you may view a live webcast on our website at www.wecenergygroup.com/invest/annualmtg.htm. By Order of the Board of Directors,	Voting Information Please follow the instructions on your Notice Regarding the Availability of Proxy Materials, proxy card, or the information forwarded to you by your bank or broker, as applicable. The internet and telephone voting facilities will close at 10:59 p.m. Central time, on Wednesday, May 1, 2019.
	Registered Stockholders of Record
	You may vote using one of the following voting methods. Please make sure you have your proxy card in hand and follow the instructions.

	Visit www.investorvote.com
		or scan the QR code with your smart phone

	Call toll-free 800-652-8683

	Sign, date and return your proxy card
	Stockholders who beneficially hold shares in street name through an intermediary on this date must obtain a legal proxy from their broker, bank or other nominee granting the right to vote. All stockholders of record may vote in person at the meeting. Beneficial owners may vote in person at the meeting if they have a legal proxy, as described on page P-74.
	If you receive paper copies of the proxy materials, please consider signing up to receive them electronically in the future by following the instructions contained on page P-76. By delivering our proxy materials electronically, we can provide our stockholders with the information they need in a more cost-effective and timely manner. Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on May 2, 2019 — The Proxy Statement and 2018 Annual Report are available at www.envisionreports.com/wec.

Margaret C. Kelsey Executive Vice President, General Counsel and Corporate Secretary March 21, 2019



WEC Energy Group	P-8	2019 Proxy Statement

PROXY SUMMARY

This summary is intended to highlight certain information found within this proxy statement. This summary does not contain all of the information that you should consider. Please read the entire proxy statement before voting. Additional information regarding WEC Energy Group, Inc.'s (the "Company") 2018 performance can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.




			Election of 13 Directors
			The Board recommends a vote FOR each nominee listed below.
			• Strong corporate governance practices consistently recognized with strong governance ratings. • All candidates are highly regarded executives who possess strong integrity. • Slate of candidates embodies diversity of knowledge, skills, experiences, gender, ethnicity, tenure and maturity.
			See pages P16-P22 for more information.



Name	Professional Principal Experience	Age	Director Since	Indep.
Barbara L. Bowles (Presiding Independent Director)	Retired Vice Chair, Profit Investment Management	71	1998	Yes
Albert J. Budney, Jr.	Retired President, Niagara Mohawk Holdings, Inc.	71	2015	Yes
Patricia W. Chadwick	President, Ravengate Partners, LLC	70	2006	Yes
Curt S. Culver	Non-Executive Chairman, MGIC Investment Corporation	66	2004	Yes
Danny L. Cunningham	Retired Partner and Chief Risk Officer, Deloitte & Touche LLP	63	2018	Yes
William M. Farrow III	Chairman, CEO and owner, Winston and Wolfe LLC	63	2018	Yes
Thomas J. Fischer	Principal, Fischer Financial Consulting LLC	71	2005	Yes
J. Kevin Fletcher	President and CEO, WEC Energy Group, Inc.	60	2019	No
Gale E. Klappa	Executive Chairman of the Board, WEC Energy Group, Inc.	68	2003	No
Henry W. Knueppel	Retired Chairman and CEO, Regal Beloit Corporation	70	2013	Yes
Allen L. Leverett	Former CEO and President, WEC Energy Group, Inc.	52	2016	No
Ulice Payne, Jr.	Managing Member, Addison-Clifton, LLC	63	2003	Yes
Mary Ellen Stanek	Managing Director & Director of Asset Management, Baird Financial Group	62	2012	Yes

Directors John Bergstrom and William Brodsky will complete their service as directors in 2019 and thus are not serving as nominees for election at the 2019 Annual Meeting. The Company sincerely thanks them for their many important contributions, leadership and years of dedicated service. Mr. Brodsky currently serves as a member of the Finance Committee. Mr. Bergstrom currently chairs the Compensation Committee and is a member of the Audit and Oversight Committee; the Board is finalizing its plan for appointing a new Compensation Committee Chair. See pages P29-P31 for more information on committee assignments.



WEC Energy Group	P-9	2019 Proxy Statement

Through its ongoing succession planning process, the Board seeks to maintain a composition of directors that collectively possess the skills and qualifications to provide effective oversight of the Company’s strategic initiatives, financial and operational performance, and enterprise risks.

The 2019 director nominees are highly regarded leaders who possess strong integrity, and embody a diversity of knowledge, skills, experiences, gender, ethnicity, tenure, and maturity to effectively carry out the Board's oversight duties and responsibilities on behalf of the Company’s stockholders and other stakeholders.

Director nominees by the numbers

(based upon 13 members)

* As reported by individual directors; see page P-15 for more information.



GOVERNANCE BEST PRACTICES	INDEPENDENT BOARD AND COMMITTEES	ADVANCED SHAREHOLDER RIGHTS

• Annual election of directors since 2005 • Ongoing Board succession planning • Annual Board and committee evaluations • Regular continuing education programs presented by internal and third-party experts • Stock ownership requirements	• 10 of 13 independent directors • Independent presiding director has specified duties • Fully independent committee membership, except for the Executive Committee • Executive sessions without management scheduled at each regular Board and committee meeting	• Majority vote standard for uncontested elections • Bylaws include proxy access provision • One-share, one-vote standard • Special meeting provisions



WEC Energy Group	P-10	2019 Proxy Statement




			Advisory Vote to Approve Compensation of the Named Executive Officers
			The Board recommends a vote FOR the advisory vote on Executive Compensation.
			• Our compensation program focuses on key Company results (financial, safety, customer satisfaction, diversity) that are aligned with our strategic goals. • A substantial portion of compensation is at risk and tied to Company performance. • The compensation program has a long-term orientation aligned with stockholder interests.
			A comprehensive discussion of our executive compensation program, “Compensation Discussion and Analysis,” begins on page P-35 of the Proxy Statement.

Our Business Performance

WEC Energy Group continued to achieve solid financial and operational results in 2018 while maintaining focus on the fundamentals - reliability, operating efficiency, financial discipline, customer care, and safety. As a result, the Company was able to deliver continued long-term value for our stockholders and customers.



WEC Energy Group	P-11	2019 Proxy Statement

Our Executive Compensation Program

The Compensation Committee routinely evaluates the executive compensation program to ensure that it is competitive with respect to attracting and retaining key talent, linked to our financial and operational performance objectives, and aligned with industry best practices based upon input from stockholders and our compensation consultant. The Committee also takes into account prior say-on-pay results.



Best practices in executive compensation
• Aligned with long-term performance and business strategy • Includes short- and long-term metrics, cash and equity; substantial portion at risk • Annual say-on-pay advisory vote		• Independent compensation consultant • Meaningful stock ownership requirements • Clawback policy • Anti-hedging and anti-pledging policy

Compensation program links pay to performance

The executive compensation program has been designed so that total direct compensation (“TDC”) is strongly tied to the achievement of our short-term and long-term goals. A substantial portion of pay is “at risk” and, generally, the value will only be realized upon a strong overall corporate performance.



	Salary	Annual Incentive	Performance Unit Plan	Stock Options and Restricted Stock
When Granted	Reviewed Annually
Performance Type	Short-Term		Long-Term
Award Type	Cash		Equity*
Performance Period	Ongoing	1 year	3 Years	1 to 3 Year Vesting
How Payout is Determined	Role; responsibilities; market data; committee judgment	Formulaic: • Financial (EPS, cash flow, utility net income) • Operational (safety, customer satisfaction, diversity)	Formulaic: • TSR • Authorized ROE	Formulaic: Stock price performance

* Performance units are settled in cash.



* Based upon metrics for Gale Klappa. Approximately 85% of our CEO’s TDC, and an average of 82% of the other NEOs' TDC, is tied to Company performance and not guaranteed.		We maintain a largely consistent approach to our compensation program from year to year, while also responding to stockholder feedback. Historically, this has resulted in favorable approval ratings of our annual advisory say-on-pay proposal.




			Ratification of Deloitte & Touche LLP as Independent Auditors for 2019
			The Board recommends a vote FOR ratification of Deloitte & Touche LLP as independent auditors for 2019
			• The Audit Committee annually evaluates the performance of Deloitte & Touche LLP and confirms that retention is in the best interests of the Company and its stockholders. • Deloitte & Touche LLP is an independent firm with significant industry and financial reporting expertise, and fees that are appropriate for the size and scope of the Company.
			See pages P69-P71 for more information.



WEC Energy Group	P-12	2019 Proxy Statement

PROXY STATEMENT

This proxy statement is being furnished to stockholders beginning on or about March 21, 2019, in connection with the solicitation of proxies by the WEC Energy Group, Inc. (“WEC Energy Group” or the “Company”) Board of Directors (the “Board”) to be used at the Annual Meeting of Stockholders on Thursday, May 2, 2019 (the “Meeting”) at 10:00 a.m., Central time, at Concordia University Wisconsin in the R. John Buuck Field House located at 12800 North Lake Shore Drive, Mequon, Wisconsin 53097, and at all adjournments or postponements of the Meeting, for the purposes listed in the Notice of 2019 Annual Meeting of Stockholders.

PROPOSAL 1: ELECTION OF DIRECTORS – TERMS EXPIRING IN 2020

WEC Energy Group’s bylaws require each director to be elected annually to hold office for a one-year term. This is an uncontested election; therefore, our majority vote standard for election of directors will apply. Under this standard, the director nominees will be elected only if the number of votes cast favoring such nominee’s election exceeds the number of votes cast opposing that nominee’s election, as long as a quorum is present. Therefore, presuming a quorum is present, shares not voted, whether by broker non-vote, abstention, or otherwise, have no effect in the election of directors. Proxies may not be voted for more than 13 persons in the election of directors.

Acting on the recommendation of the Corporate Governance Committee, the Board's nominees for election are:



Barbara L. Bowles		J. Kevin Fletcher
Albert J. Budney, Jr.		Gale E. Klappa
Patricia W. Chadwick		Henry W. Knueppel
Curt S. Culver		Allen L. Leverett
Danny L. Cunningham		Ulice Payne, Jr.
William M. Farrow III		Mary Ellen Stanek
Thomas J. Fischer


•	Each nominee has consented to being nominated and to serve if elected. In the unlikely event that any nominee becomes unable to serve for any reason, the proxies will be voted for a substitute nominee selected by the Board upon the recommendation of the Corporate Governance Committee of the Board.


•	Directors John F. Bergstrom and William J. Brodsky complete their service as directors in 2019 and thus will not serve as nominees for re-election at the 2019 annual meeting of stockholders. The Company sincerely thanks them for their many important contributions, leadership and years of dedicated service.

In selecting the 2019 director nominees, the Corporate Governance Committee and the Board determined that the candidates collectively embody a wide body of characteristics germane to executing the duties of the Board, including the general criteria, qualifications, diversity, and independence reported below, and which are described in more detail for each director in his/her respective biographies found under the heading, “2019 Director Nominees for Election.”

The Board of Directors recommends that you vote “FOR” all of the director nominees.



WEC Energy Group	P-13	2019 Proxy Statement

DIRECTOR NOMINATION AND EVALUATION PROCESS

Nomination Process

Candidates for director nomination may be proposed in a number of ways, including by stockholders, the Corporate Governance Committee, and other members of the Board. The Corporate Governance Committee may pay a third party to identify qualified candidates; however, no such firm was engaged with respect to the nominees listed in this proxy statement.

The Corporate Governance Committee will consider director candidates recommended by stockholders provided that the stockholders submitting recommendations comply with requirements and procedures set forth in our bylaws. Stockholders may also nominate director candidates by following the procedures outlined on P-78. No formal stockholder nominations or recommendations for director candidates were received in connection with the 2019 Annual Meeting.

Evaluation Process

The Corporate Governance Committee evaluates director candidates, including those proposed by stockholders, through the lens of its ongoing director succession planning process, whereby the Corporate Governance Committee ensures that the Board is composed of directors who embody certain minimum criteria, and who, as a group, have the skills and experiences to effectively oversee management's strategy for operating in a complex industry while performing their fiduciary obligations.

When a person is initially identified as a potential candidate, the Corporate Governance Committee may collect and review publicly available information regarding the person to assess whether that person should be considered further. If the Corporate Governance Committee determines that the candidate warrants further consideration, the chair or another member of the Board of Directors contacts the person. Generally, if the person expresses a willingness to be considered and to serve on the Board, the Corporate Governance Committee requests additional information from the candidate, reviews the person’s accomplishments and qualifications, and conducts one or more interviews with the candidate. In certain instances, Corporate Governance Committee members may contact one or more references provided by the candidate, or may contact other members of the business community or other persons who may have greater firsthand knowledge of the candidate. The Committee will utilize third parties if and as needed to assist with these activities. As a final step, the candidate interviews with members of the Board, following which the Corporate Governance Committee will propose a recommendation regarding nomination to the Board for its discussion and final determination.

Director Term Limits

The Board does not believe it is appropriate or necessary to limit the number of terms a director may serve. The Board values the participation and insight of directors who have developed an increased understanding of the governance of the Company and the specific issues it faces doing business in a complex, regulated industry, as well as those directors who bring fresh and varied perspectives, resulting in a Board with a balanced tenure.

DIRECTOR QUALIFICATIONS

The Corporate Governance Committee and the Board evaluate director nominees in light of the Board’s current members, with the goal of recommending nominees with diverse backgrounds and experiences who, together with the current directors, can best perpetuate the success of WEC Energy Group’s business and represent stockholder interests. By adhering to a philosophy whereby director nominees are evaluated on the basis of certain minimum qualifications, Board diversity, and core competencies, the Board is able to attract director candidates that bring a broad range of perspectives and experiences, and who will effectively contribute to and complement the Board.

Key factors considered in recommending the 2019 director nominees are listed below:


•	To be eligible for consideration, the Board believes that any proposed candidate must demonstrate certain minimum qualifications, which the Corporate Governance Committee reviews annually:




• Proven integrity • Ability to objectively appraise problems • Relevant technological, political, economic, or social/culture experience • Familiarity with national and international issues affecting the Company's business	• Mature and independent judgment • Ability to evaluate strategic options/risks • Social consciousness • Contribution to the Board's desired diversity and balance	• Vision and imagination • Sound business experience/acumen • Achievement of prominence in career • Availability to serve for five years before reaching the directors' retirement age of 72 (in the case of new directors)



WEC Energy Group	P-14	2019 Proxy Statement

•

While the Corporate Governance Committee does not have a specific policy with regard to the consideration of diversity in identifying director nominees, it strives to cast a wide net and recommend candidates who each bring a unique perspective to the Board in order to contribute to a collective diversity - diversity of knowledge, skills, experiences, thought, gender, ethnicity, tenure, and maturity.

•

Directors’ qualifications are also evaluated in the context of the Board’s strategic initiatives, financial and operational performance objectives, and material risks. With that in mind, the Corporate Governance Committee and Board have determined through the Board succession planning process that the Board’s composition should consist of candidates that collectively possess a specific set of core competencies as listed in the Proxy Summary on P-10, in order to effectively carry out its oversight function.

During the third quarter of 2018, the Corporate Governance Committee and Board evaluated and affirmed this set of competencies. Each director then performed a self-assessment of his/her level of knowledge in each skill area using the following 3-point scale: “1” Limited knowledge (e.g., no direct experience, primary exposure comes from Board or Committee reports); “2” Intermediate knowledge (e.g., general managerial/oversight experience or broad exposure as a Board or Committee member); “3” Advanced knowledge (e.g., direct experience; subject matter expert). A summary of the Board’s level of knowledge with respect to each of the core competencies was included in the Proxy Summary on page P-10. At least one director possesses advanced knowledge in each core competency.

DIRECTOR INDEPENDENCE

The guidelines the Board uses in determining director independence are located in Appendix A of the Corporate Governance Guidelines ("Guidelines"), which are available on the Corporate Governance section of our Company’s website at www.wecenergygroup.com/govern/governance.htm. These Guidelines provide that the Board should consist of at least a two-thirds majority of independent directors. The independence standards found in our Guidelines are not only in compliance with the listing standards of the New York Stock Exchange (“NYSE”), but are actually more stringent than the NYSE rules. In order to be deemed independent, the individual must have no material relationship with the Company that would interfere with the exercise of good judgment in carrying out his or her responsibilities as a director.

Prior to initial and annual election, all directors complete a detailed questionnaire that elicits information that is used to ensure compliance with the Board’s and the NYSE’s standards of independence. The Corporate Governance Committee also reviews potential conflicts of interest, including related-party transactions, interlocking directorships, and substantial business, civic,

and/or social relationships with other members of the Board that could impair the prospective Board member’s ability to act independently from the other Board members and management. The Board also considers whether a director’s immediate family members meet the independence criteria outlined in the Guidelines, as well as whether a director has certain relationships with WEC Energy Group’s affiliates, when determining the director’s independence.

The Board has affirmatively determined that Directors Bergstrom, Bowles, Brodsky, Budney, Chadwick, Culver, Cunningham, Farrow, Fischer, Knueppel, Payne, and Stanek are independent. Directors Klappa, Fletcher, and Leverett are not independent due to their employment with the Company.

Director Stanek. Since 2005, WEC Energy Group has engaged Baird Financial Group primarily to provide consulting services for investments held in the Company’s various benefit plan trusts. The Board reviewed the terms of this engagement, including the approximately $680,000 in fees paid to Baird in 2018 (which are less than one-tenth of 1% of Baird’s total revenue), and Ms. Stanek’s position at Baird, and concluded that such engagement is not material and did not impact Ms. Stanek’s independence. Ms. Stanek is not involved with and does not consult on the contract with or recommendations made by Baird and receives no direct financial benefit from these services. WEC Energy Group management evaluates Baird’s services against market standards for overall quality and value on a regular basis. Neither the Board nor Ms. Stanek plays a role in the retention of Baird for these services or any related negotiation of commercial terms. In addition, WEC Energy Group’s pension trusts and other benefit accounts do not hold any investments in Baird funds.



WEC Energy Group	P-15	2019 Proxy Statement

2019 DIRECTOR NOMINEES FOR ELECTION

The following 13 individuals have been nominated for election to the Board of Directors at the WEC Energy Group Annual Meeting. Biographical information for each director nominee is set forth below. Ages are as of January 17, 2019, the date each person was designated as a nominee of the Board for election at the Meeting.



	Barbara L. Bowles Age: 71 Director Since: 1998 Board Committees: Audit and Oversight; Corporate Governance (Chair); Executive WEC Board: Independent Presiding Director


•	Profit Investment Management LLC - Retired Vice Chair. Served as Vice Chair from January 2006 until retirement in December 2007. Profit Investment Management is an investment advisory firm.


•	The Kenwood Group, Inc. - Retired Chairman. Served as Chairman from 2000 until 2006 when The Kenwood Group, Inc. merged into Profit Investment Management. CEO from 1989 to 2005.


•	Director of Hospira, Inc. from 2008 to 2015.


•	Director of WEC Energy Group since 1998; Director of Wisconsin Electric Power Company (subsidiary of WEC) from 1998 to June 2015.

Core competencies, qualifications and experience

As founder, CEO, and retired Chairman of The Kenwood Group, Inc., a Chicago-based investment advisory firm that managed pension funds for corporations, public institutions, and endowments, Ms. Bowles, who is a Chartered Financial Analyst, brings over 20 years of investment advisory experience to our Board of Directors. Having also served as a portfolio manager and utility analyst for more than 10 years, and as a chief investor relations officer for two Fortune 50 companies, she contributes valuable perspective as to what issues matter to large investors. In the role of Chief Compliance Officer of Profit Investment Management, Ms. Bowles gained a deep understanding of corporate governance issues and concerns, experience she applies to her positions as Chair of WEC Energy Group's Corporate Governance Committee and independent presiding director. She also contributes valuable risk management and financial reporting insights as a member of the Audit and Oversight Committee, expertise she developed from current and past service as a director on the boards of several other public companies where she has served on the audit and finance committees. With utility subsidiaries located in Chicago, the Board of Directors also benefits from the economic and political perspectives Ms. Bowles provides as a result of her involvement in several important non-profit organizations in Chicago.



	Albert J. Budney, Jr. Age: 71 Director Since: 2015 Board Committee: Corporate Governance


•	Niagara Mohawk Holdings, Inc. - Retired President and Director. Served as President and Director from 1999 to 2002. Niagara Mohawk Holdings, Inc. is a holding company whose subsidiaries distribute electricity in New York.


•	Director of WEC Energy Group since June 2015; Director of Integrys Energy Group from February 2007 to June 2015.

Core competencies, qualifications and experience

With over 40 years of utility experience in senior leadership positions, Mr. Budney brings to our Board of Directors extensive knowledge in managing the operations of a utility company and the complexities that arise from operating in a highly-regulated industry. He has acquired considerable board experience in utility industry mergers and acquisitions having served as a director of Niagara Mohawk Holdings when it was acquired by National Grid and of Integrys Energy Group when it was acquired by the Company. Mr. Budney brings to the Board knowledge of environmental issues that he gained as President of Niagara Mohawk Holdings while supervising the Vice President of Environmental Affairs. This provided Mr. Budney with experience he applied as a founding member of the Environmental Committee of the Board at Integrys Energy Group prior to its acquisition by WEC Energy Group. Having also served as the Chair of the Corporate Governance Committee and lead director of Integrys Energy Group, Mr. Budney’s broad knowledge in governance, corporate management, and strategic planning matters are very valuable to the Board in carrying out its oversight in these areas.



WEC Energy Group	P-16	2019 Proxy Statement



	Patricia W. Chadwick Age: 70 Director Since: 2006 Board Committees: Audit and Oversight; Finance


•	Ravengate Partners, LLC - President since 1999. Ravengate Partners, LLC provides businesses and not-for-profit institutions with advice about the financial markets, business management, and global economics.


•	Director of AMICA Mutual Insurance Company since 1992; Director of VOYA Mutual Funds (previously ING Mutual Funds) since 2006; Director of The Royce Funds since 2009.


•	Director of WEC Energy Group since 2006; Director of Wisconsin Electric Power Company (subsidiary of WEC) from 2006 to June 2015.

Core competencies, qualifications and experience

Ms. Chadwick, who is a Chartered Financial Analyst, brings to our Board of Directors extensive investment management expertise gained from more than 30 years of experience as an investment professional, portfolio manager or principal. As founder and President of Ravengate Partners, a firm that has been educating and advising businesses and not-for-profit institutions about the financial markets and global macro economy since 1999, Ms. Chadwick's insights into the investment industry’s perspectives is valuable to the Board’s financial planning and strategy discussions. Her knowledge of capital markets is particularly helpful to WEC Energy Group and its subsidiaries, which operate in a capital intensive industry and consistently access the capital markets. Ms. Chadwick serves as a director and committee member on the boards of two registered investment companies, VOYA Mutual Funds and The Royce Funds, through which she has developed extensive governance experience with respect to audit oversight and financial reporting. As a board director and Finance Committee member of AMICA Mutual Insurance Company, she has gained a deep understanding of insurance risk management and oversight matters, which is valuable experience that she applies to her role on the WEC Energy Group Finance Committee.



	Curt S. Culver Age: 66 Director Since: 2004 Board Committees: Corporate Governance; Finance (Chair)


•	MGIC Investment Corporation - Non-Executive Chairman of the Board since March 2015. Served as Chairman from 2005 to February 2015, CEO from 2000 to February 2015, and President from 1999 to 2006. MGIC Investment Corporation is the parent of Mortgage Guaranty Insurance Corporation.


•	Mortgage Guaranty Insurance Corporation - Non-Executive Chairman of the Board since March 2015. Served as Chairman from 2005 to February 2015, CEO from 1999 to February 2015, and President from 1996 to 2006. Mortgage Guaranty Insurance Corporation is a private mortgage insurance company.


•	Director of MGIC Investment Corporation since 1999.


•	Director of WEC Energy Group since 2004; Director of Wisconsin Electric Power Company (subsidiary of WEC) from 2004 to June 2015.

Core competencies, qualifications and experience

Having served for 15 years as the CEO of Mortgage Guaranty Insurance Corporation and its parent company, MGIC Investment Corporation, Mr. Culver brings to our Board of Directors a strong working knowledge of the strategic, economic, and public policy issues facing a large, regulated, publicly-held company headquartered in Milwaukee, Wisconsin. His expertise in risk management and oversight is particularly valuable in his service as chair of the Finance Committee, while his insurance industry experience puts him in a position to lead the Committee’s evaluation of the Company's overall risk management program. Mr. Culver's broad corporate governance experience, developed from his extensive past and present service on the MGIC boards, as well as several highly-visible Milwaukee-area non-profit entities and two private for-profit organizations, is of great value to the Board as it carries out its oversight responsibilities.



WEC Energy Group	P-17	2019 Proxy Statement



	Danny L. Cunningham Age: 63 Director Since: 2018 Board Committees: Audit and Oversight


•	Deloitte & Touche LLP - Retired Partner and Chief Risk Officer. Served as Partner from 2002 to 2015 and as Chief Risk Officer from 2012 to 2015. Deloitte & Touche LLP is an industry-leading audit, consulting, tax, and advisory firm.


•	Director of Actuant Corporation since 2016.


•	Director of WEC Energy Group since January 2018.

Core competencies, qualifications and experience

Mr. Cunningham brings to our Board of Directors more than 30 years of experience serving public audit clients in a broad array of industries, including manufacturing, printing, process, software, and financial services, as well as a deep understanding of the business, economic, compliance, and governmental environment in which the Company and many of the Company's major customers operate. Mr. Cunningham’s strong expertise in financial reporting, internal controls, and audit functions are of great value to the Board as it fulfills its responsibility for oversight of the Company's accurate preparation of financial statements and disclosures, and compliance with legal and regulatory requirements. Having served as chief risk officer at

Deloitte & Touche LLP, he gained keen insights into the complexities of risk management, through which he applies his expertise in assessing the effectiveness of the Company's practices and policies to mitigate enterprise-wide risks. Mr. Cunningham’s multi-national experience brings the added diversity of a global perspective to the Board as it evaluates its strategic objectives, while his past service on the boards of several major Milwaukee-area not-for-profit organizations equips him to contribute thoughtful insights on issues impacting the city’s culture, workforce, and economic vitality.



	William M. Farrow III Age: 63 Director Since: 2018 Board Committees: Finance


•	Winston and Wolfe, LLC - Chairman and Chief Executive Officer since 2010. Winston and Wolfe LLC is a privately held technology development and advisory company.


•	Urban Partnership Bank - Retired President and CEO from August 2010 to January 2018. UPB provides financial services in moderate income communities located in Chicago, Detroit and Cleveland.


•	Director of CBOE Global Markets Inc. since 2016; Director of Echo Global Logistics Inc. since 2017.


•	Director of WEC Energy Group since January 2018.

Core competencies, qualifications and experience

Mr. Farrow brings to our Board of Directors 40 years of senior leadership experience in managing business operations, technology development, enterprise risk and strategy. His extensive professional experience in the banking and financial markets, accompanied by knowledge acquired from his service on the boards of CBOE Global Markets and the Federal Reserve Bank of Chicago, enables him to add significant value to the Board’s oversight of the Company’s financial management strategy. His first-hand experience and perspectives in addressing advances in information technology, as well as the experience he’s gained as a current board member on the Audit Committee for both CBOE Global Markets and Echo Global Logistics, is particularly valuable to the Board as WEC Energy Group companies address complex risks, including those associated with protecting operating systems and assets against physical and cyber threats. Having spent his career in the City of Chicago, Mr. Farrow is also able to provide the Board with economic and public policy insight as it relates to conducting business in Chicago, which is further enhanced by the strong relationships he has developed with key leaders while serving on the boards of several highly-visible Chicago-area private, not-for-profit and community organizations. This is especially important given the sizable, long-term construction project that is underway by the Company’s Illinois utility subsidiary to modernize the natural gas infrastructure in the City of Chicago, which requires ongoing collaboration with city and state government officials and regulatory agencies.



WEC Energy Group	P-18	2019 Proxy Statement



	Thomas J. Fischer Age: 71 Director Since: 2005 Board Committees: Audit and Oversight (Chair); Compensation; Executive


•	Fischer Financial Consulting LLC - Principal since 2002. Fischer Financial Consulting LLC provides consulting on corporate financial, accounting, and governance matters.


•	Director of Actuant Corporation from 2003 to January 2017; Director of Badger Meter, Inc. since 2003; Director of Regal Beloit Corporation since 2004.


•	Director of WEC Energy Group since 2005; Director of Wisconsin Electric Power Company (subsidiary of WEC) from 2005 to June 2015.

Core competencies, qualifications and experience

Mr. Fischer provides our Board of Directors with significant expertise in accounting and auditing matters, including financial reporting and regulatory compliance, risk assessment and management, and corporate governance issues. His experience in these areas comes from 33 years of work at Arthur Andersen, a large, international independent accounting firm, where for 22 years, he served as a partner responsible for services provided to large, complex public and private companies and several public utility audits. Since 2002, Mr. Fischer has provided consulting services to companies in the areas of corporate financial, accounting, and governance matters. Mr. Fischer, who is a Certified Public Accountant, brings extensive knowledge and experience to his responsibilities as WEC Energy Group's Audit and Oversight Committee Chair as a result of his past and present service on several other audit committees at public companies based in Wisconsin. His significant expertise is invaluable to WEC Energy Group's Board as it navigates a complex and evolving regulatory compliance landscape.



	J. Kevin Fletcher Age: 60 Director Since: 2019


•	WEC Energy Group, Inc. - CEO since February 2019; President since October 2018.


•	Wisconsin Electric Power Company (subsidiary of WEC) - Chairman of the Board and Chief Executive Officer since February 2019; President from May 2016 to November 2018; Executive Vice President-Customer Service and Operations from June 2015 to May 2016; Senior Vice President-Customer Operations from October 2011 to June 2015.


•	Director of WEC Energy Group, Inc. since February 2019; Director of Wisconsin Electric Power Company since June 2015.


•	Mr. Fletcher also serves as an executive officer and/or director of several other major subsidiaries of WEC Energy Group.

Core competencies, qualifications and experience

Mr. Fletcher has more than 40 years of experience working in the public utility industry, including nearly 25 years at a senior leadership level. Prior to joining the Company in 2011, Mr. Fletcher served as Senior Vice President-Community and Economic Development at Georgia Power, the largest subsidiary of The Southern Company, a public utility holding company serving the southeastern United States. During his 34-year career with Southern Co., 16 of those years as an officer, Mr. Fletcher held leadership positions in operations, customer service, marketing and sales. When he first joined WEC Energy Group, he served as Senior Vice President-Customer Operations of its utility subsidiaries, with overall responsibility for the planning, engineering, construction, operation and maintenance of the Company’s electric and natural gas distribution systems in Wisconsin and Michigan’s Upper Peninsula. In May 2016, he was appointed to serve as President of the Company’s Wisconsin utility subsidiaries, and assumed responsibilities as President of the Company’s Minnesota and Michigan utility subsidiaries in September 2018. In October 2018, Mr. Fletcher was appointed President of WEC Energy Group, followed by his appointment to CEO in February 2019, whereby he has financial and operational responsibility for all of the Company's utility subsidiaries. He also has held responsibility for the supplier diversity initiative across all of the Company’s utilities. With his extensive experience in business operations, customer service, and senior leadership of publicly regulated utilities, Mr. Fletcher contributes substantive insight into the Company’s industry and customers, to the management team, and to the Board.



WEC Energy Group	P-19	2019 Proxy Statement



	Gale E. Klappa Age: 68 Director Since: 2003 Board Committee: Executive (Chair)


•	WEC Energy Group, Inc. - Executive Chairman since February 2019; Chairman of the Board and CEO from 2004 to May 2016 and October 2017 to February 2019; Non-Executive Chairman of the Board from May 2016 to October 2017; President from 2003 to August 2013.


•	Wisconsin Electric Power Company (subsidiary of WEC) - Chairman of the Board from 2004 to May 2016 and January 2018 to February 2019; CEO from 2003 to May 2016 and January 2018 to February 2019; President from 2003 to June 2015.


•	Director of Associated Banc-Corp since 2016 and Director of Badger Meter, Inc. since 2010, both headquartered in Wisconsin; Director of Joy Global Inc. from 2006 to 2017.


•	Director of WEC Energy Group, Inc. since 2003; Director of Wisconsin Electric Power Company from 2003 to May 2016 and January 2018 to present.


•	Mr. Klappa also serves a director of several other major subsidiaries of WEC Energy Group.

Core competencies, qualifications and experience

Mr. Klappa has more than 40 years of experience working in the public utility industry, including more than 25 at a senior executive level. He retired as the Company's CEO in May 2016, at which time he assumed the role of Non-Executive Chairman of the Board. Prior to joining the Company in 2003, Mr. Klappa served in various executive leadership roles at The Southern Company, a public utility holding company serving the southeastern United States. Under his leadership, WEC Energy Group successfully completed its 2015 acquisition of Integrys Energy Group, which nearly doubled the employee and customer population, and increased the Company’s geographic footprint to four states. With his extensive experience in the business operations and C-suite leadership of publicly regulated utilities, his service as a board member for several other public companies, and his contributions to significant economic development initiatives in southeastern Wisconsin, Mr. Klappa has led the Board with a deep understanding of the financial investment decisions and public policy issues facing large public companies. In October 2017, after the Company’s then-CEO, Allen Leverett, suffered a stroke, the Board appointed Mr. Klappa to serve in the role of CEO, while also having him retain his role of Board Chairman. With the appointment of Mr. Fletcher as CEO effective February 2019, Mr. Klappa now serves as Executive Chairman. Mr. Klappa’s deep knowledge of the Company’s industry, customers, stockholders, and management team is of great value to the Board.



	Henry W. Knueppel Age: 70 Director Since: 2013 Board Committees: Audit and Oversight; Corporate Governance


•	Regal Beloit Corporation - Retired Chairman of the Board and CEO. Served as CEO from 2005 to 2011 and as Chairman from 2006 to 2011. Regal Beloit Corporation is a leading manufacturer of electric motors, mechanical and electrical motion controls, and power generation products.


•	Harsco Corporation - Independent, Non-Executive Chairman of the Board from September 2012 until September 2014. Served as Interim Chairman and CEO from February 2012 to September 2012 and Director from 2008 to April 2016. Harsco Corporation is a diversified, worldwide industrial services company.


•	Director of Regal Beloit Corporation since 1987; Director of Snap-on Incorporated since 2011.


•	Director of WEC Energy Group since 2013; Director of Wisconsin Electric Power Company (subsidiary of WEC) from 2013 to June 2015.

Core competencies, qualifications and experience

With more than 30 years of senior management experience at Regal Beloit Corporation, including five years as the combined Chairman of the Board and CEO, Mr. Knueppel brings extensive executive management experience to our Board of Directors, including strategic planning, financial strategy and talent management perspective. Regal Beloit Corporation is a Wisconsin-based manufacturer of electrical motors, mechanical and electrical motion controls, and power generation products, which gives Mr. Knueppel knowledge of key equipment used in the Company's operations. He currently serves on the boards of several large, publicly-traded industrial companies and provides the Board with perspective on operational matters the Company faces in serving its large commercial and industrial customers. Mr. Knueppel also brings to the Board a wide range of knowledge and experience in corporate governance, having served for more than 30 years as a director for several publicly-traded companies, including his role as the independent, non-executive chairman of the board of Harsco Corporation.



WEC Energy Group	P-20	2019 Proxy Statement



	Allen L. Leverett Age: 52 Director Since: 2016


•	WEC Energy Group, Inc. - President from August 2013 to October 2018; CEO from May 2016 to October 2017; Executive Vice President from 2004 through July 2013; CFO from 2003 until 2011. Mr. Leverett also served as the principal executive officer of WEC Energy Group’s generation operations from 2011 to May 2016.


•	Wisconsin Electric Power Company (subsidiary of WEC) - Chairman of the Board and CEO from May 2016 through December 2017; President from June 2015 to May 2016; Executive Vice President from 2004 through June 2015; CFO from 2003 until 2011.


•	Director of WEC Energy Group since January 2016; Director of Wisconsin Electric Power Company from June 2015 to January 2018.

Core competencies, qualifications and experience

Having worked in the public utility industry for nearly 25 years, Mr. Leverett has a deep understanding of the complexities of the Company’s industry, operations, and regulatory environment, while having built extensive senior leadership experience. Mr. Leverett served in executive positions at Georgia Power and Southern Company Services, where he held overall responsibility for financial planning and analysis, capital markets and leasing, treasury, and investor relations. He joined WEC Energy Group in 2003 as CFO and proceeded to hold numerous executive positions, including President and CEO of the Company’s power generation group, with overall responsibility for the electric generation portfolio, fuel procurement, environmental compliance, and renewable energy development strategy. Following the Company’s acquisition of Integrys Energy Group in June 2015, Mr. Leverett served as President of the Company’s utilities located in Wisconsin, Michigan, and Minnesota through early 2016. Effective May 1, 2016, Mr. Leverett was appointed as CEO of WEC Energy Group and served in that role until October 2017, when he suffered a stroke and began a medical leave of absence. In October 2018, Mr. Leverett resigned as President of the Company, while retaining his role as a member of the Board. Mr. Leverett’s experience and insights in running a regulated public company serve as critical inputs to the Board’s oversight of the Company’s long-term strategic plan.



	Ulice Payne, Jr. Age: 63 Director Since: 2003 Board Committees: Compensation; Executive; Finance


•	Addison-Clifton, LLC - Managing Member since 2004. Addison-Clifton, LLC provides global trade compliance advisory services.


•	Director of Foot Locker, Inc. since December 2016; Director of Manpower Group since 2007; Trustee of The Northwestern Mutual Life Insurance Company since 2005.


•	Director of WEC Energy Group since 2003; Director of Wisconsin Electric Power Company (subsidiary of WEC) from 2003 to June 2015.

Core competencies, qualifications and experience

Mr. Payne brings to our Board of Directors strong senior leadership and public service experience within the greater Milwaukee community and State of Wisconsin, having previously served in roles that included the Securities Commissioner for the State of Wisconsin, managing partner of the Milwaukee office of the law firm Foley & Lardner LLP, and president and CEO of the Milwaukee Brewers Baseball Club, Inc. In addition, Mr. Payne is involved in numerous Milwaukee-area non-profit entities, making him well-positioned to provide the Board with perspective on the economic and social issues affecting the greater Milwaukee area, as well as a broad spectrum of the Company's customers. As founder and President of Addison-Clifton, LLC, which provides global trade compliance consulting, Mr. Payne understands the importance of providing clients with exceptional customer service, a focus that is critical to execution of WEC Energy Group's strategic initiatives. Mr. Payne also contributes valuable financial and risk assessment insights gained throughout his career, including from his past and present service on the boards of several public companies, for which he has served as a member of the Audit, Finance, and/or Corporate Governance committee at each of these companies.



WEC Energy Group	P-21	2019 Proxy Statement



	Mary Ellen Stanek Age: 62 Director Since: 2012 Board Committee: Finance


•	Baird Financial Group - Managing Director and Director of Asset Management since 2000. Baird Financial Group provides wealth management, capital markets, private equity, and asset management services to clients worldwide.


•	Baird Advisors - Chief Investment Officer since 2000. Baird Advisors is an institutional fixed income investment advisor.


•	Baird Funds, Inc. - President since 2000. Baird Funds is a publicly registered investment company.


•	Trustee of The Northwestern Mutual Life Insurance Company since 2009.


•	Director of Journal Media Group, Inc. and its predecessor companies from 2002 to April 2016.


•	Director of WEC Energy Group since 2012; Director of Wisconsin Electric Power Company (subsidiary of WEC) from 2012 to June 2015.

Core competencies, qualifications and experience

Ms. Stanek, who is a Chartered Financial Analyst, brings to our Board of Directors extensive financial and investment strategy expertise, resulting from over 40 years of investment management experience. As Managing Director and Director of Asset Management of Baird Financial Group, a position she has held since 2000, Ms. Stanek's expertise in fixed income investments provides the Board and management with invaluable financial strategy insight relative to WEC Energy Group and its subsidiaries, which customarily issue debt securities as a means of raising capital. As a member of the WEC Energy Group Finance Committee, she also offers valuable perspective on insurance risk matters, having served for 15 years as a director of West Bend Mutual Insurance Company. In addition to her recognition as a prominent business leader in Milwaukee's financial community, Ms. Stanek has dedicated significant time to serving on the boards of a large number of Milwaukee-area non-profit organizations, through which she has developed strong relationships with key community leaders and stakeholders. From these experiences, she brings the Board insightful perspectives on issues impacting the culture and viability of today’s workforce.



WEC Energy Group	P-22	2019 Proxy Statement

GOVERNANCE

Accountability to stockholders is critical to the Company’s long-term success. We have mechanisms in place to ensure that management and the Board hear, understand, and consider the issues that matter most to our stockholders. This ongoing engagement provides valuable insight into how our stockholders view the Company’s practices and policies, shapes the processes used to evaluate goals and expectations, and identifies emerging issues that may affect our corporate governance and compensation practices.

STOCKHOLDER ENGAGEMENT

Under the Board’s oversight, Company leadership regularly engages with investors to discuss business results, strategic direction, and corporate governance and compensation practices through a year-round stockholder engagement program. The Company’s outreach and engagement program took many forms during 2018:


•	Direct engagement by senior management with the Company’s stockholders to discuss issues of interest, including corporate governance, executive compensation, and corporate responsibility practices. These conversations are reported to the Board and are taken into consideration when reviewing and modifying governance and compensation practices and policies.


•	Investor presentations conducted at analyst meetings and investor conferences across the U.S., Canada, and Europe.


•	CEO, CFO, and other senior management meetings and conference calls with stockholders to discuss corporate strategy, financial and business performance, and to update stockholders on key developments.


•	Invitations to investors to listen to Webcasts of the Annual Meeting and quarterly earnings conference calls, and to view the annual report, news releases, Securities and Exchange Commission ("SEC") filings, and other significant corporate publications on our Website.


•	The opportunity to attend and voice opinions at our Annual Meeting.


•	The ability for stockholders to submit stockholder proposals and director nominees, and to formally nominate director candidates using proxy access as permitted under our bylaws.


•	Annual election of directors, who are elected by majority vote in uncontested elections.


•	Annual advisory vote on our executive compensation program (“say-on-pay”).


•	Strong Board committee structure, which allows the Board to focus on issues that matter most to our stockholders, including consideration of previous stockholder votes on say-on-pay, director elections, and other matters when developing policies and practices.


•	Process for stockholders to directly correspond with individual directors via the Corporate Secretary page P-31.

Below is a summary of our yearly corporate governance practices related to stockholder engagement on environmental, social and governance ("ESG") topics.



SUMMER	FALL	WINTER	SPRING

• Review results from Annual Meeting of Stockholders • Engage with stockholders to discuss voting results • Conduct annual assessment of corporate governance practices to identify potential areas of focus • Discuss voting results, investor feedback, and annual assessment with Board	• Meet with institutional investors to discuss our governance and compensation practices and to address questions or concerns • Consider enhancements to our practices and disclosures based on investor feedback • Share investor feedback and recommendations for changes in practices and disclosures with Board committees and full Board	• Approve any changes to corporate governance and compensation practices • Develop disclosures for the proxy statement	• Publish annual disclosure documents (Form 10-K, Annual Report, Proxy Statement) • Hold Annual Meeting of Stockholders



WEC Energy Group	P-23	2019 Proxy Statement

CORPORATE GOVERNANCE FRAMEWORK

Corporate Governance Guidelines

In 1996, WEC Energy Group became one of the earliest adopters of a formal set of Corporate Governance Guidelines, which have been modified over the years in response to evolving governance best practices and stockholder expectations. To maintain effective guidelines, the Corporate Governance Committee annually reviews the Company’s governance practices, taking into consideration discussions with stockholders as part of our investor outreach and engagement program, industry surveys, and benchmarking studies, as well as governance guidelines published by institutional investors and proxy advisors.

Key governance practices adopted by the Board include:



GOVERNANCE PRINCIPLES	WEC ENERGY GROUP PRACTICES
Board composition	ü	• Annual election of directors since 2005 • 10 of 13 independent directors (based on director nominees) • Diverse representation of skills and competencies • Regular Board refreshment and mix of tenure • Comprehensive, ongoing Board succession planning process • Expectation that directors will dedicate sufficient time to perform duties
Board leadership	ü	• Separate CEO/Chair roles • Presiding independent director with defined duties • Chairman active in stockholder engagement and communications
Board governance practices	ü	• Expectation that directors participate in annual meeting with stockholders • Annual performance evaluations of CEO, Board, and Board committees • 100% independent Board Committees (except for the Executive Committee) • Board participation in critical activities, including agenda setting and strategic planning • Complete access to management and outside advisors for Board members • Stock ownership requirements • Regular executive sessions of independent directors at Board and committee meetings
Stockholder voting rights	ü	• Stockholders' ability to nominate directors; proxy access bylaw adopted in 2016 • One-share, one-vote standard; dual class voting is not practiced • Special meeting provisions
Executive compensation	ü	• Competitively tailored to business and industry, aligned with long-term performance and business strategy • Utilizes short- and long-term metrics, cash, and equity components; substantial portion is at risk • Public disclosure of peer groups, benchmarks, and performance measurements • Clawback policies for cash and equity; prohibition of hedging and pledging of Company securities • Stock ownership requirements

Business Conduct and Ethics

WEC Energy Group’s Code of Business Conduct, which was benchmarked and updated in 2017 to comport with best practices, addresses, among other things: conflicts of interest; confidentiality; fair dealing; protection and proper use of Company assets; and compliance with laws, rules, and regulations (including insider trading laws). All WEC Energy Group directors, executive officers, and employees, including the principal executive, financial, and accounting officers, have a responsibility to comply with WEC Energy Group’s Code of Business Conduct, to seek advice in doubtful situations, and to report suspected violations. The Company has not provided any waiver to the Code for any director, executive officer, or other employee.

The Company has several ways individuals can raise questions concerning WEC Energy Group’s Code of Business Conduct and other Company policies. As one reporting mechanism, the Company has contracted with an independent service so that individuals can confidentially and anonymously report suspected violations of the Code of Business Conduct or other concerns, including those regarding accounting, internal accounting controls, or auditing matters.

Related Party Transactions/Conflicts of Interest

The Code of Business Conduct addresses, among other things, what actions are required when potential conflicts of interest may arise, including those from related-party transactions. Specifically, executive officers and members of the Board must obtain approval of the Audit and Oversight Committee Chair before: (1) obtaining any financial interest in or participating in any business relationship with any company, individual, or concern doing business with WEC Energy Group or any of its subsidiaries



WEC Energy Group	P-24	2019 Proxy Statement

that might influence the individual’s decisions or job performance; (2) participating in any joint venture, partnership, or other business relationship with WEC Energy Group or any of its subsidiaries; and (3) serving as an officer or member of the board of any substantial, outside for-profit organization. Furthermore, before serving as an officer or member of the board of any substantial, outside for-profit organization, the CEO must obtain the approval of the full Board; members of the WEC Energy Group Board must obtain the prior approval of the Corporate Governance Committee. In addition, executive officers must obtain the prior approval of the CEO before accepting a position with a substantial non-profit organization; members of the Board must notify the Compliance Officer when joining the board of a substantial non-profit organization, but do not need to obtain prior approval.

WEC Energy Group’s Code of Business Conduct also requires employees and directors to notify the Compliance Officer of situations where family members are a supplier or significant customer of WEC Energy Group or employed by one. To the extent the Compliance Officer deems it appropriate, he will consult with the Audit and Oversight Committee Chair in situations involving executive officers and members of the Board.

BOARD LEADERSHIP

Leadership Structure

Consistent with WEC Energy Group's bylaws and our Corporate Governance Guidelines, the Board retains the right to exercise its discretion in combining or separating the offices of Chief Executive Officer and Chairman of the Board. From May 1, 2016 to October 12, 2017, the office of the CEO was separated from the office of Chairman of the Board. Gale Klappa served as Non-Executive Chairman and Allen Leverett served as CEO. On October 12, 2017, the Board appointed Gale Klappa to serve as CEO during Mr. Leverett's medical leave. Mr. Klappa served as Chairman and CEO until February 1, 2019, when the Board appointed J. Kevin Fletcher as CEO and named Mr. Klappa as Executive Chairman of the Board, thus again separating the CEO and Chair positions.

Independent Presiding Director

Our Corporate Governance Guidelines detail the specific duties to be performed by the Board’s Independent Presiding Director, a position that is currently held by Director Bowles, Chair of the Corporate Governance Committee. Duties of this role include:


•	presides at all meetings of the Board at which the Chairman is not present, including executive sessions of the

non-management directors;


•	serves as liaison between the CEO and the independent directors under most circumstances, although each individual director has full access to the CEO;


•	has authority to call meetings of the independent directors;


•	reviews and provides input to meeting agendas for the Board and its Committees;


•	reviews meeting schedules to assure there is sufficient time for discussion of all agenda items;


•	reviews all proposed changes to committee charters; and


•	leads the annual Board evaluation.

RISK OVERSIGHT

The Board has overall responsibility for risk oversight and oversees the Company’s risk environment and associated management practices as part of its evaluation of the Company’s ongoing operations and strategic direction. During meetings of the Board and its committees, directors receive regular briefings from management on specific areas of risk, as well as emerging risks to the enterprise.

While it has retained oversight of certain broad risks that could impact the Company’s long-term strategy, including, for example, climate change risk, the Board has delegated certain risk monitoring responsibilities to its committees. With the exception of the Executive Committee, each of the Board’s committees regularly reports to the full Board on risks that fall within designated areas of responsibility, as described in each committee’s respective charter. Examples of risk monitoring activity that have been designated to committees is shown in the chart below. More information on the committees’ duties and responsibilities begins on page P-27.



WEC Energy Group	P-25	2019 Proxy Statement

Executive sessions for the non-management directors are generally held at every regularly scheduled committee meeting, during which committees have direct access to, and meet as needed with, Company representatives without other management present to discuss matters related to, among other things, risk management. Outside of scheduled meetings, the Board, its committees, and individual Board members have full access to senior executives and other key employees, including the CEO, CFO, General Counsel, Chief Audit Officer, Compliance Officer, Chief Information Officer, and Controller.

The Company has an Enterprise Risk Steering Committee, comprised of senior-level management employees whose purpose is to foster an enterprise-wide approach to identifying and managing risk. The Audit Services department conducts a semiannual enterprise risk assessment, and as part of this process, business leaders identify existing, new, or emerging issues or changes within their business areas that could have enterprise implications. Senior management is tasked with ensuring that these risks and opportunities are appropriately addressed. The results of these risk management efforts are reported to the executive leadership team and are the subject of regular reports to the Board.

The Board believes that its leadership structure and enterprise risk management program support the risk oversight function of the Board.

ENVIRONMENTAL AND SOCIAL GOVERNANCE

The Board is vigilant in its oversight of management’s strategic decision-making as it navigates important developments in our industry, including new technologies, customer preferences, commodity prices, energy resiliency efforts, and ESG initiatives. Examples of how the Company’s ESG practices are aligned with the needs of our stakeholders and support the well-being of the areas we serve are provided here.

Environmental Stewardship

Protecting the environment is a responsibility we take seriously. Since 2000, the Company has invested in repowered generating facilities, renewable energy projects, state-of-the-art air quality control systems, power grid upgrades, and additional environmental protection technologies that position our electric generating companies well for the future.

We are working with our industry partners, environmental groups, and the State of Wisconsin to reduce carbon dioxide emissions, and we have set a two-part goal:


•	40 percent reduction below 2005 levels by 2030


•	80 percent reduction below 2005 levels by 2050

We are collaborating with Electric Power Research Institute and other industry members on the analysis of potential pathways beyond 2030 for electric companies, taking into account International Energy Agency’s 2-degree scenario and other publicly available data.



WEC Energy Group	P-26	2019 Proxy Statement

Social Performance

Our employees are the bedrock of our business, driving key corporate initiatives focused on safety, diversity and inclusion, and talent development.


•	Since 2008, the total number of OSHA-recordable and lost-time incidents have been reduced by 59 and 51 percent, respectively.


•	Forbes included WEC Energy Group in its 2019 ranking of ‘Best Employers for Diversity’ and in its 2017 ranking of ‘America’s Best Employers.’


•	We conducted a Company-wide, confidential employee engagement survey in 2018 to gauge employees' perceptions of their work, their leadership and the Company as a whole; leadership is using the results to actively address areas where the need for improvement was identified.

We are also deeply committed to our customers, suppliers, and communities.


•	Again in 2018, WEC was recognized by Corporate Responsibility Magazine as one of the 100 best corporate citizens in America.


•	In 2018, We Energies was named the most reliable utility in the Midwest for the eighth consecutive year by PA Consulting Group.


•	Our companies spent more than $263.1 million in 2018 with certified minority-, women-, veteran- or service disabled-owned businesses, a nearly 50 percent increase over 2016.

Commitment to Reporting Transparency

In addition to engaging directly with stakeholders on environmental and social issues, we are committed to enhancing our transparency on these matters through a variety of reporting mechanisms, including:


•	In 2019, the Company will issue its 18th annual Corporate Responsibility Report, covering our ESG performance in 2018.


•	In 2019, the Company will issue its first report focused on climate change.


•	For more than a decade, the Company has disclosed information regarding operations and ESG goals, risks and opportunities to CDP; the 2018 survey responses on climate and water can be found on the Company’s website.


•	The Company contributed to Edison Electric Institute’s development of a template designed to make ESG metrics and information more accessible to investors and comparable across the electric sector.


•	See the Corporate Responsibility section of our website for more details: www.wecenergygroup.com/csr

BOARD AND COMMITTEE PRACTICES

Board Meetings and Executive Sessions

During 2018, the Board met nine times and executed one written unanimous consent. All directors attended more than 75% of the total number of meetings of the Board and Board committees on which he or she served with the exception of Mr. Leverett who was excused for medical reasons. Mr. Leverett has consistently attended Board meetings since his return. Generally, all directors are expected to attend the Company’s Annual Meetings of Stockholders. With the exception of Messrs. Bergstrom and Leverett, all directors attended the Annual Meeting of Stockholders held on May 3, 2018.

At every regularly scheduled Board and committee meeting, executive sessions are scheduled, and are generally held, for the non-management directors to meet without management present.



WEC Energy Group	P-27	2019 Proxy Statement

Director Orientation and Continuing Education

Management takes very seriously its responsibility to onboard new directors and continuously educate existing directors on the unique and complex issues inherent in operating a public company in the regulated utility industry.

Management has created a robust orientation program that introduces new directors to the Company’s organizational structure, businesses, strategies, risks and opportunities, which assists new directors in developing company and industry knowledge to optimize their service on the Board. Directors Cunningham and Farrow engaged in a substantive orientation program throughout 2018, which included both in-house and field programming.

Opportunities to participate in regular continuing education are provided to the directors in the form of internally developed materials and presentations, programs presented by third parties, and financial support to attend qualifying academic or other independent programs, which help our directors enhance the skills and knowledge needed to carry out their responsibilities. During 2018, management facilitated numerous educational programs in which both Company and third-party experts presented to and discussed with the directors a variety of strategic and industry-related topics.

Succession Planning

Board Succession Planning

The Board is regularly engaged in rigorous discussions on Board succession planning, taking into consideration matters such as: current inventory of director skills; diversity, including gender, ethnicity, retirement age, and tenure; and future competencies needed to support appropriate oversight of the Company's strategic initiatives, financial and operational performance, and enterprise risks. During 2018, these discussions took into consideration the impact of Directors Bergstrom and Brodsky completing their service on the Board in May 2019, as well as the fact that multiple other directors will reach retirement age over the next two years. The election of Directors Cunningham and Farrow in 2018, and the election of Director Fletcher in February 2019, added skills and perspectives to the Board in areas it had determined were essential for carrying out its oversight responsibilities.

Management Succession Planning

The Compensation Committee, which has responsibility for reviewing organizational changes that have a significant impact on the Company, as well as reviewing succession plans for executive officers, held numerous discussions throughout 2018 to ensure continuity with respect to a number of organizational matters that occurred. The Committee also reviewed the Company’s recruiting and development programs, which included updates on key talent, as well as workforce demographics across the organization.

Throughout 2018, the Board was also actively engaged in oversight of the executive succession planning process. The Board spent considerable time discussing the progress of Mr. Leverett’s recovery with respect to his potential return to his executive duties. It also devoted significant time to evaluating alternatives in the event that Mr. Leverett did not return in an executive capacity.

In October 2018, Mr. Leverett resigned from his duties as President of WEC Energy Group, while retaining his position as a Board director. The Board approved of management’s plan for a series of internal promotions, including appointing Mr. Fletcher as President, and associated reorganization activities in response to Mr. Leverett’s resignation. Effective February 1, 2019, the Board appointed Mr. Fletcher as CEO of WEC Energy Group to succeed Mr. Klappa, who was appointed Executive Chairman.

The Board also approved the creation of the Office of the Chair comprised of four industry veterans: Gale Klappa,

J. Kevin Fletcher, Scott Lauber, and Frederick Kuester. The Board believes this structure is appropriate to continue the smooth transition in leadership following Mr. Leverett's resignation as an active employee. This structure solidifies a strong and seasoned leadership team with the experience and skills needed to establish and carry out the Company's strategies, and provides the Company with strong and balanced executive leadership.

Annual Performance Evaluations

CEO Performance

The Compensation Committee, on behalf of the Board, annually evaluates the performance of the CEO and reports the results to the Board. The CEO is evaluated in a number of areas including leadership, vision, financial stewardship, strategy development and execution, management development, effective communication with constituencies, demonstrated integrity, and effective representation of the Company in community and industry affairs.

As part of this practice, the Compensation Committee obtains from each non-management director his or her input on the CEO’s performance, which is summarized and then discussed in executive session with all non-management directors. The Chair of the Compensation Committee shares the evaluation results with the CEO. This procedure allows the Board to evaluate the CEO and to communicate the Board’s expectations. The process is also used by the Compensation Committee to determine appropriate compensation for the CEO. This process was completed for Mr. Klappa in December 2018.



WEC Energy Group	P-28	2019 Proxy Statement

Board Performance

The Board annually evaluates its own performance, a process that is led by the Independent Presiding Director. The Board uses a framework of questions developed by the National Association of Corporate Directors to conduct the performance evaluation. Each director independently considers several “reflection” questions, in addition to a list of questions that fall within five broad categories: board composition and leadership; board committees; board meetings; overall effectiveness of the Board; and overall effectiveness of the Board with regard to management.

The Independent Presiding Director uses this framework to provide each Board member an opportunity to speak candidly during one-on-one discussion sessions. At the conclusion of the individual feedback sessions, the Independent Presiding Director leads the Corporate Governance Committee and the Board through a group discussion of key takeaways. This evaluation process was conducted in November and December of 2018, following which the Corporate Governance Committee and the Board discussed the findings at their meetings in January 2019. It is routine practice for the Board to incorporate recommendations from its evaluation process into new standard practices, and the Corporate Governance Committee routinely uses the results of this process to foster continuous improvement of the Board’s governance activities.

Committee Performance

Each committee, except the Executive Committee, conducts an annual performance evaluation of its own activities and reports the results to the Board. During this evaluation, each committee compares its performance against the requirements of its charter and its annual planning calendar; contemplates a series of questions related to the qualifications and performance of committee members; considers the quality and quantity of information provided to the committee in advance of its meetings; and evaluates the effectiveness of the processes the committee uses to carry out its oversight responsibilities. The results of the annual evaluations are used by each committee to identify its strengths and areas where its governance practices can be improved. Each committee may recommend changes to its charter to the full Board based upon the evaluation results.

BOARD COMMITTEES

The Board of Directors has the following committees: Audit and Oversight, Compensation, Corporate Governance, Finance, and Executive. Each committee, except the Executive Committee, operates under a charter approved by the Board, which can be found on our website at www.wecenergygroup.com/govern/committee-comp.htm. With the exception of the Executive Committee, only independent directors serve on the standing committees.

Directors John Bergstrom and William Brodsky will complete their service as directors in 2019 and thus are not serving as nominees for re-election at the 2019 Annual Meeting. Mr. Brodsky currently serves as a member of the Finance Committee. Mr. Bergstrom currently chairs the Compensation Committee and is a member of the Audit and Oversight Committee.The Board is finalizing its plan for appointing a new Compensation Committee Chair.



Audit and Oversight
Members	Key Responsibilities

Thomas J. Fischer, Chair John F. Bergstrom Barbara L. Bowles Patricia W. Chadwick Danny L. Cunningham Henry W. Knueppel 2018 Meetings: 6	• Oversee the integrity of the financial statements. • Oversee management compliance with legal and regulatory requirements. • Review the Company's environmental and compliance programs. • Review, approve, and evaluate the independent auditors’ services. • Oversee the performance of the internal audit function and independent auditors. • Discuss risk management and major risk exposures and steps taken to monitor and control such exposures. • Establish procedures for the submission and treatment of complaints and concerns regarding the Company’s accounting controls and auditing matters. • Prepare the audit committee report required by the SEC for inclusion in the proxy statement.
The Audit and Oversight Committee is a separately designated committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The Audit and Oversight Committee consists solely of independent directors who meet the independence requirements of the SEC, NYSE and the Board's Corporate Governance Guidelines. In addition, the Board has determined that all of the members of the Audit and Oversight Committee are financially literate as required by NYSE rules and qualify as audit committee financial experts within the meaning of SEC rules.



WEC Energy Group	P-29	2019 Proxy Statement



Compensation
Members	Key Responsibilities

John F. Bergstrom, Chair Thomas J. Fischer Ulice Payne, Jr. 2018 Meetings: 6	• Determine and annually review the Compensation Committee’s compensation philosophy. • Oversee the development of competitive, performance-based executive and director compensation programs. • Review and approve the compensation paid to select employees, including certain senior officers and executive officers (including base salaries, incentive compensation, and benefits). • Establish and administer the CEO compensation package. • Set performance goals relevant to the CEO’s compensation. • Annually evaluate CEO performance and determine compensation adjustments. • Oversee succession planning and assignments to key executive officers. • Prepare the report required by the SEC for inclusion in the proxy statement. • Review the results of the most recent stockholder advisory vote on compensation of the NEOs.
The Compensation Committee consists solely of independent directors who meet the independence requirements of the SEC, NYSE and the Board's Corporate Governance Guidelines. The Compensation Committee is also charged with administering the compensation package of WEC Energy Group’s non-management directors. The Compensation Committee meets with the Corporate Governance Committee annually to review the compensation package of WEC Energy Group’s non-management directors and to determine the appropriate amount of such compensation. The Compensation Committee, which has authority to retain advisers, including compensation consultants, at WEC Energy Group’s expense, retained Frederic W. Cook & Co., Inc. ("FW Cook") to analyze and help develop the Company’s executive compensation program, and to assess whether the compensation program is competitive and supports the Committee’s objectives. FW Cook also assesses and provides recommendations on non-management director compensation, as discussed in more detail on page P-32. FW Cook is engaged solely by the Compensation Committee to provide executive compensation consulting services, and does not provide any additional services to the Company. In connection with its retention of FW Cook, the Compensation Committee reviewed FW Cook’s independence including: (1) the amount of fees received by FW Cook from WEC Energy Group as a percentage of FW Cook’s total revenue; (2) FW Cook’s policies and procedures designed to prevent conflicts of interest; and (3) the existence of any business or personal relationships that could impact independence. After reviewing these and other factors, the Compensation Committee determined that FW Cook is independent and the engagement did not present any conflicts of interest. FW Cook also determined that it was independent from the Company’s management, which was confirmed in a written statement delivered to the Compensation Committee. For more information regarding our executive and director compensation processes and procedures, please refer to “Compensation Discussion and Analysis” beginning on page P-35 and to "Director Compensation" beginning on page P-32, respectively.



Corporate Governance
Members	Key Responsibilities

Barbara L. Bowles, Chair Albert J. Budney, Jr. Curt S. Culver Henry W. Knueppel 2018 Meetings: 3	• Establish and annually review the Corporate Governance Guidelines to verify that the Board is effectively performing its fiduciary responsibilities to stockholders. • Establish and annually review director candidate selection criteria. • Identify and recommend candidates to be named as nominees of the Board for election as directors. • Lead the Board in its annual review of the Board’s performance.
The Corporate Governance Committee consists solely of independent directors who meet the independence requirements of the NYSE and the Board's Corporate Governance Guidelines.



WEC Energy Group	P-30	2019 Proxy Statement



Finance
Members	Key Responsibilities

Curt S. Culver, Chair William J. Brodsky Patrica W. Chadwick William M. Farrow III Ulice Payne, Jr. Mary Ellen Stanek 2018 Meetings: 4	• Review and monitor the Company’s current and long-range financial policies and strategies, including our capital structure and dividend policy. • Authorize the issuance of corporate debt within limits set by the Board. • Discuss policies and financial programs with respect to financial risk management. • Approve the Company’s financial plan, including the capital budget.
The Finance Committee consists solely of independent directors who meet the independence requirements of the NYSE and the Board's Corporate Governance Guidelines.



Executive
The Board also has an Executive Committee, which may exercise all powers vested in the Board except action regarding dividends or other distributions to stockholders, filling Board vacancies, and other powers which by law may not be delegated to a committee or actions reserved for a committee comprised of independent directors. The members of the Executive Committee are Gale E. Klappa (Chair), John F. Bergstrom, Barbara L. Bowles, Thomas J. Fischer, and Ulice Payne, Jr. The Executive Committee did not meet in 2018.

WHERE TO FIND MORE INFORMATION ON GOVERNANCE

You can find our Corporate Governance Guidelines, Code of Business Conduct, and other corporate governance materials, including WEC Energy Group’s Restated Articles of Incorporation, Bylaws, Board committee charters and Board contact information, on the Corporate Governance section of our website at www.wecenergygroup.com/govern/governance.htm. You can request copies of these materials from the Corporate Secretary at the address provided below under “Communicating with the Board."

COMMUNICATING WITH THE BOARD

Correspondence may be sent to the directors, including the non-management directors, in care of the Corporate Secretary, Margaret C. Kelsey, at the Company’s principal business office, 231 W. Michigan Street, PO Box 1331, Milwaukee, Wisconsin 53201. All communications received as set forth above will be opened by the Corporate Secretary for the sole purpose of confirming the contents represent a message to the Company’s directors. Pursuant to instructions from the Board of Directors, all communication, other than advertising, promotion of a product or service, or patently offensive material, will be forwarded promptly to the addressee.



WEC Energy Group	P-31	2019 Proxy Statement

DIRECTOR COMPENSATION

Consistent with its charter, the Compensation Committee seeks to maintain a competitive director compensation program that enables the Company to attract and retain key individuals and to motivate them to help the Company achieve its short- and long-term goals. As such, the committee is responsible for reviewing key market-based trends in director compensation and benefits packages and for recommending changes to the Board, as appropriate, that will attract and retain quality directors. The Committee’s charter authorizes it to engage consultants or advisors in connection with its review and analysis of director compensation. The Compensation Committee used FW Cook during 2018 for this purpose. Directors who are also employees of the Company do not receive additional compensation for service as a director.

2018 Compensation of the Board of Directors

The following table describes the components of the non-management director compensation program during 2018. The Compensation Committee believes that this program:


•	is equitable based upon the work required of directors serving an entity of the Company’s size and scope, and


•	ties the majority of director compensation to stockholder interests because the value of the equity awards fluctuates depending upon the Company’s stock price.



Compensation Element	2018 Non-Management Director Compensation Program
Annual Cash Retainer	$100,000, which may be deferred at the director’s option
Annual Equity Retainer	$135,000 in restricted stock, which vests one year from grant date
Annual Committee Chair Fees
Ÿ Audit and Oversight	$20,000 paid in $5,000 quarterly increments
Ÿ Compensation	$15,000 paid in $3,750 quarterly increments
Ÿ Corporate Governance	$15,000 paid in $3,750 quarterly increments
Ÿ Finance	$15,000 paid in $3,750 quarterly increments
Board and Committee Meeting Fees	None
Stock Ownership Guideline	Ownership of common stock or deferred stock units that have a value equal to five times the annual cash retainer for non-management directors to be satisfied within five years of joining the Board

Insurance is also provided by the Company for director liability coverage, fiduciary and employee benefit liability coverage, and travel accident coverage for director travel on Company business. The premiums paid for this insurance are not included in the amounts reported in the table below.

The Company reimburses directors for all out-of-pocket travel expenses. These reimbursed amounts are not reflected in the table below.

Deferred Compensation Plan. Non-management directors may defer all or a portion of their cash fees pursuant to the Directors’ Deferred Compensation Plan. Directors have two investment options in the plan - the Company's phantom stock measurement fund or a prime rate fund. The value of the phantom stock measurement fund appreciates or depreciates based upon market performance of the Company's common stock, and it also grows through the accumulation of reinvested dividend equivalents. Deferral amounts are credited in the name of each participating director to accounts on the books of WEC Energy Group that are unsecured and are payable only in cash at the time elected by the director. Deferred amounts will be paid out of general corporate assets or the assets of the Wisconsin Energy Corporation 2014 Rabbi Trust discussed later in this proxy statement.

Legacy Charitable Awards Program. Directors elected prior to January 1, 2007 participate in a Directors’ Charitable Awards Program under which the Company intends to contribute up to $100,000 per year for 10 years to one or more charitable organizations chosen by each participating director, including employee directors, following the director’s death. Charitable donations under the program will be paid out of general corporate assets. Directors derive no financial benefit from the program, and all income tax deductions accrue solely to the Company. The tax deductibility of these charitable donations may mitigate the net cost to the Company. The Directors’ Charitable Awards Program has been eliminated for any new directors elected after January 1, 2007. Directors already participating as of that date are Messrs. Bergstrom, Culver, Fischer, Klappa, and Payne, and Mmes. Bowles and Chadwick.



WEC Energy Group	P-32	2019 Proxy Statement

Director Compensation Table. The following table summarizes the total compensation received by each of WEC Energy Group’s non-management directors during 2018.



Name	Fees Earned or Paid In Cash	(1) Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation	Change in Pension Value and Nonqualified Deferred Compensation Earnings	All Other Compensation	Total
Name	($)	($)	($)	($)	($)	($)	($)
John F. Bergstrom	115,000	135,000	—	—	—	21,947	271,947
Barbara L. Bowles	115,000	135,000	—	—	—	20,608	270,608
William J. Brodsky	100,000	135,000	—	—	—	—	235,000
Albert J. Budney, Jr.	100,000	135,000	—	—	—	—	235,000
Patricia W. Chadwick	100,000	135,000	—	—	—	30,110	265,110
Curt S. Culver	115,000	135,000	—	—	—	21,689	271,689
Danny L. Cunningham	100,000	135,000	—	—	—	—	235,000
William M. Farrow III	100,000	135,000	—	—	—	—	235,000
Thomas J. Fischer	120,000	135,000	—	—	—	21,947	276,947
Henry W. Knueppel	100,000	135,000	—	—	—	—	235,000
Allen L. Leverett ⁽²⁾	—	—	—	—	—	—	—
Ulice Payne, Jr.	100,000	135,000	—	—	—	15,901	250,901
Mary Ellen Stanek	100,000	135,000	—	—	—	—	235,000


(1)	Other than Mr. Cunningham (2,175 shares), Mr. Farrow (2,114 shares), and Mr. Leverett (23,248 shares), each director listed in this table held 4,828 shares of restricted stock as of the close of business on December 31, 2018.


(2)	Effective October 10, 2018, Mr. Leverett resigned his position as President of WEC Energy Group but continues to serve as a member of the Board. Mr. Leverett did not receive any non-management director compensation during 2018. All compensation that Mr. Leverett received during 2018 for serving as an executive officer is reported in the "Summary Compensation Table" on page P-52.

Fees Earned or Paid in Cash. The amounts reported in the Fees Earned or Paid in Cash column include annual cash-based retainers for each non-management director and applicable annual committee chair fees earned during 2018 regardless of whether such retainers and fees were paid in cash or deferred.

Stock Awards. On January 2, 2018, each non-management director (other than Mr. Leverett) received his or her 2018 annual equity retainer in the form of restricted stock equal to a value of $135,000. The amounts reported in the Stock Awards column reflect the aggregate grant date fair value, as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718, excluding estimated forfeitures, of the restricted stock awarded. Each reported restricted stock award vests in full one year from the grant date.

All Other Compensation. All amounts reported in the All Other Compensation column represent costs for the Directors’ Charitable Awards Program. See “Legacy Charitable Awards Program” above for additional information.

2019 Compensation of the Board of Directors

In December 2018, the Compensation Committee completed its annual review of director compensation and determined that, based upon research provided by FW Cook, total non-management director compensation was consistent with the market median. As a result, the Compensation Committee concluded and the Board agreed that it was appropriate for 2019 Board compensation to remain unchanged from the approved 2018 levels.



WEC Energy Group	P-33	2019 Proxy Statement

PROPOSAL 2: ADVISORY VOTE TO APPROVE COMPENSATION

OF THE NAMED EXECUTIVE OFFICERS

Pursuant to Section 14A of the Securities Exchange Act of 1934, the Company seeks your advisory vote on the approval of the compensation paid to our named executed officers (commonly referred to as "Say-on-Pay") as described in the Compensation Discussion and Analysis and the related tables included in this proxy statement. Approval, on a non-binding, advisory basis, of the compensation of the named executed officers requires the affirmative vote of a majority of the votes cast in person or by proxy at the Meeting. Presuming a quorum is present, shares not voted, whether by broker non-vote, abstention, or otherwise, have no effect on the outcome of this matter. Because your vote is advisory, it will not be binding on the Board or the Company. However, the Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation.

As described in the Compensation Discussion and Analysis on pages P-35 through P-51 of this proxy statement, the Compensation Committee has structured the Company’s executive compensation program with the following objectives in mind:


•	offer a competitive, performance-based plan;


•	enable the Company to attract and retain key individuals;


•	reward achievement of the Company’s short-term and long-term goals; and


•	align with the interest of the Company’s stockholders and customers.

As described in this proxy statement, the Company believes that the compensation paid to our named executed officers in 2018 was well-tailored to achieve these objectives, tying a significant portion of total pay to performance and aligning the interests of the named executed officers with those of stockholders and customers. We encourage you to carefully review the Compensation Discussion and Analysis and related tables included in this proxy statement, which describe in greater detail WEC Energy Group’s compensation philosophy and programs, as well as the 2018 compensation levels, in connection with approval of the following resolution:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers as disclosed in the Proxy Statement for the 2019 Annual Meeting.”

The Board of Directors recommends that you vote “FOR”

the advisory vote on Executive Compensation.



WEC Energy Group	P-34	2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

The following discussion provides an overview and analysis of our executive compensation program, including the role of the Compensation Committee of our Board, the elements of our executive compensation program, the purposes and objectives of these elements, and the manner in which we established the compensation of our named executive officers ("NEOs") for fiscal year 2018.

References to “we,” “us,” “our,” "Company," and “WEC Energy Group” in this discussion and analysis mean WEC Energy Group, Inc. and its management, as applicable.

EXECUTIVE SUMMARY

Overview

The primary objective of our executive compensation program is to provide a competitive, performance-based plan that enables the Company to attract and retain key individuals and to reward them for achieving both the Company’s short-term and long-term goals without creating an incentive for our NEOs to take excessive risks. Our program has been designed to provide a level of compensation that is strongly dependent upon the achievement of short-term and long-term goals that are aligned with the interests of our stockholders and customers. To that end, a substantial portion of pay is at risk, and generally, the value will only be realized upon strong corporate performance.

2018 Business Highlights

During 2018, we continued to make excellent progress in our efforts to integrate employees, merge and improve business processes, and consolidate IT infrastructure following our acquisition of Integrys Energy Group in June 2015. At the same time, the Company achieved solid results and continued to create long-term value for our stockholders and customers by focusing on the following:



•	World-class reliability	•	Operating efficiency	•	Employee safety
•	Financial discipline	•	Exceptional customer care

In addition, the seamless continuity in leadership provided by our senior executive management team following Allen Leverett’s unexpected illness in October 2017 resulted in solid earnings and cash flow generation for the Company in 2018.

Commitment to Stockholder Value Creation. Financially, WEC Energy Group again delivered solid earnings growth, generated strong cash flow, and increased the dividend for the 15^th consecutive year. In January 2018, the Board raised the quarterly dividend 6.25% to $0.5525 per share, equivalent to an annual rate of $2.21 per share. In January 2019, the Board increased the quarterly dividend 6.8% to $0.59 per share, which is equivalent to an annual rate of $2.36 per share, in line with our plan to maintain a dividend payout ratio of 65% to 70% of earnings. Overall, the Company also turned in strong performances in customer satisfaction and network reliability during 2018.



WEC Energy Group	P-35	2019 Proxy Statement

Specific Company achievements during 2018 include:



2018 Financial Highlights • WEC Energy Group delivered solid earnings growth again, generated strong cash flow, and increased the dividend for the 15^th consecutive year. • We achieved fully diluted earnings per share of $3.34. ⁽²⁾ • Each of our regulated utility subsidiaries earned its allowed rate of return. • We returned approximately $697.3 million to WEC Energy Group stockholders through dividends. • Our common stock traded at a then all-time high of $75.48 on December 12, 2018. • In January 2019, the Board raised the quarterly dividend to $0.59 per share, which is equivalent to an annual dividend rate of $2.36 per share.		⁽¹⁾For 2017, excludes a one-time $0.65 per share gain related to a revaluation of our deferred taxes as a result of the Tax Cuts and Jobs Act of 2017. For 2016, 2015, and 2014, excludes costs of $0.01, $0.30, and $0.06 per share, respectively, related to our acquisition of Integrys. See Appendix A on P-79 for a full GAAP reconciliation and an explanation of why we believe the presentation of adjusted earnings per share is relevant and useful to investors.

2018 Performance Highlights


•	WEC Energy Group was again recognized in 2018 by Corporate Responsibility Magazine as one of the 100 best corporate citizens in America.


•	PA Consulting Group named We Energies the most reliable utility in the Midwest for the eighth year in a row.


•	Set a new long-term goal to reduce carbon dioxideemissions below 2005 levels by 80% by 2050.


•	Closed nearly 1,500 megawatts of older, less efficient coal-fired generation.


•	Spent $263.1 million with qualified women-, minority-, and veteran- or service disabled- owned businesses, the highest spending with diverse suppliers in the Company’s history.⁽²⁾


•	Wisconsin Public Service Corporation ("WPSC") was named as a 2018 Most Trusted Utility Brand by Market Strategies International.


•	All major utility subsidiaries either met or exceeded our overall customer satisfaction targets.⁽²⁾


•	Continued to grow the Company’s non-utility energy infrastructure segment, acquiring majority interests in three different wind farms with a total investment of approximately $587 million. Filed with the Public Service Commission of Wisconsin for approval for WPSC to partner with Madison Gas & Electric on two major solar projects in Wisconsin, where WPSC would own 100 megawatts of each project.

(2) This measure is a component of our short-term incentive compensation program.



WEC Energy Group	P-36	2019 Proxy Statement

Long-Term Stockholder Returns

Over the past decade, WEC Energy Group has consistently delivered among the best total returns in the industry and did so again in 2018.




⁽¹⁾The Five-Year Cumulative Return Chart shows a comparison of the cumulative total return, assuming reinvestment of dividends, over the last five years had $100 been invested at the close of business on December 31, 2013. For information about the Custom Peer Index Group, see "Performance Graph" in the Company's 2018 Annual Report.	Source: Bloomberg; assumes all dividends are reinvested and returns are compounded daily.

Consideration of 2018 Stockholder Advisory Vote and Stockholder Outreach

At the 2018 Annual Meeting of Stockholders, the Company’s stockholders approved the compensation of our named executive officers with 94% of the votes cast. The Compensation Committee considered this outcome as well as the feedback received during meetings we again held with several of our institutional stockholders. During 2018, we held dedicated sessions with stockholders representing approximately 27.1% of the Company’s outstanding common stock about our governance and compensation practices. The Compensation Committee is always looking for ways to refine our compensation program. However, in light of the significant stockholder support our executive compensation program received in 2018 and the payout levels under our performance-based program for 2018, the Compensation Committee believes that the current compensation program is competitive, aligned with our financial and operational performance, and in the best interests of the Company, stockholders, and customers.



WEC Energy Group	P-37	2019 Proxy Statement

COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

We have three primary elements of total direct compensation: (1) base salary; (2) annual incentive awards; and (3) long-term incentive awards consisting of a mix of performance units, stock options, and restricted stock. The Compensation Committee again retained Frederic W. Cook & Co., Inc. ("FW Cook") as its independent compensation consultant to advise the Compensation Committee with respect to our executive compensation program. The Compensation Committee generally relied on the recommendations of FW Cook as it developed the 2018 program.

As shown in the charts below, 85% of Mr. Klappa’s 2018 total direct compensation and an average of 82% of the other NEOs’ 2018 total direct compensation is tied to Company performance and is not guaranteed.

In addition to the components of total direct compensation identified above, our retirement programs are another important component of our compensation program.

To the extent feasible, we believe it is important that the Company’s compensation program not dilute the interests of current stockholders. Therefore, we currently use open-market purchases to satisfy our benefit plan obligations, including the exercise of stock options and vesting of restricted stock.

This Compensation Discussion and Analysis contains a more detailed discussion of each of the above components for 2018, including FW Cook’s recommendations with respect to each component.



WEC Energy Group	P-38	2019 Proxy Statement

Compensation Governance and Practices

The Compensation Committee annually reviews and considers the Company’s compensation policies and practices to ensure our executive compensation program aligns with our compensation philosophy. Highlighted below is an overview of our current compensation practices.



What We Do

	• Our compensation program focuses on key Company results (financial, safety, customer satisfaction, diversity) that are aligned with our strategic goals. • A substantial portion of compensation is at risk and tied to Company performance. • The compensation program has a long-term orientation aligned with stockholder interests. • The Compensation Committee retains an independent compensation consultant to help design the Company’s compensation program and determine competitive levels of pay. • The Compensation Committee's independent compensation consultant reviews competitive employment market data from two general industry surveys and a comparison group of companies similar to WEC Energy Group. • We have implemented a clawback policy that provides for the recoupment of incentive-based compensation. (page P-49) • Annual incentive-based compensation contains multiple, pre-established performance metrics aligned with stockholder and customer interests. (page P-42)	• The Performance Unit Plan award payouts (including dividend equivalents) are based on stockholder return as compared to an appropriate peer group and Additional Performance Measure(s), selected by the Compensation Committee. (page P-45) • The Performance Unit Plan requires a separation from service following a change in control for award vesting to occur. (page P-48) • Equity award and other benefit plan obligations are satisfied through open-market purchases of WEC Energy Group common stock. • Meaningful stock ownership levels are required for senior executives. (page P-49) • Ongoing engagement with investors takes place to ensure that compensation practices are responsive to stockholder interests. • We prohibit hedging and pledging of WEC Energy Group common stock. (page P-49) • We prohibit entry into any new arrangements that obligate the Company to pay directly or reimburse individual tax liability for benefits provided by the Company. (page P-50) • We prohibit repricing of stock options without stockholder approval.

Competitive Benchmarking

As a general matter, we believe the labor market for WEC Energy Group executive officers is consistent with that of general industry. Although we recognize our business is focused on the energy services industry, our goal is to have an executive compensation program that will allow us to be competitive in recruiting the most qualified candidates to serve as executive officers of the Company, including individuals who may be employed outside of the energy services industry. Further, in order to retain top performing executive officers, we believe our compensation practices must be competitive with those of general industry.

To confirm that our annual executive compensation is competitive with the market, FW Cook reviewed the compensation data obtained from Willis Towers Watson’s 2018 Executive Compensation Data Bank as well as similar data from Aon Hewitt.

FW Cook also analyzed the compensation data from a peer group of 18 companies similar to WEC Energy Group in size and business model. The methodology used by FW Cook to determine the peer group of companies is described below.

FW Cook started with U.S. companies in the Standard & Poor’s database, and then limited those companies to the same line of business as WEC Energy Group as indicated by the Global Industry Classification Standards. This list of companies was then further limited to companies with revenues between $2.5 billion and $22.8 billion (approximately one-third to three times the size of WEC Energy Group’s revenues), and that were within a reasonable size range in various other measures such as operating income, total assets, total employees, and market capitalization. From this list, FW Cook selected companies similar in overall size to WEC Energy Group with consideration given to companies that met one or more of the following criteria:


•	Diversified, technically sophisticated utility operations (e.g., multiple utilities, electric utilities);


•	Minimal non-regulated business; and/or


•	Operates in the Midwest.

These criteria resulted in a comparison group of 18 companies with median revenues and market capitalization of approximately $9.6 billion and $17 billion, respectively.



WEC Energy Group	P-39	2019 Proxy Statement

The comparison group utilized for purposes of 2018 compensation includes the same companies as the previous year’s comparison group, and was comprised of the 18 companies listed below.



• Alliant Energy Corporation	• Consolidated Edison, Inc.	• FirstEnergy Corp.	• SCANA Corporation
• Ameren Corporation	• DTE Energy Co.	• NiSource Inc.	• The Southern Company
• American Electric Power Company	• Edison International	• PG&E Corporation	• Xcel Energy Inc.
• CMS Energy Corporation	• Entergy Inc.	• PPL Corp.
• CenterPoint Energy	• Eversource Energy	• Pinnacle West Capital Corp.

The Compensation Committee approved this comparison group.

DETERMINATION OF MARKET MEDIAN

In order to determine the “market median” for our NEOs, FW Cook recommended that the survey data from Willis Towers Watson and Aon Hewitt receive a 75% weighting and the comparison group of 18 companies receive a 25% weighting. The Compensation Committee agreed with this recommendation. The survey data received a higher weighting because we consider the labor market for our executives to be consistent with that of general industry. Using this methodology, FW Cook recommended, and the Compensation Committee approved, the appropriate market median for each of our NEOs.

The comparison of each component of compensation with the appropriate market median when setting the compensation levels of our NEOs generally drives the allocation of cash versus non-cash compensation and short-term versus long-term incentive compensation.

DETERMINATION OF MESSRS. KLAPPA’S AND KUESTER’S 2018 COMPENSATION

As we previously reported, Mr. Klappa agreed to resume the role of CEO of WEC Energy Group after Mr. Leverett suffered a stroke in October 2017. In recognition of his continued service and leadership while Mr. Leverett continued to recover from his stroke, the Compensation Committee, in consultation with FW Cook regarding the appropriate pay level for Mr. Klappa under the circumstances, determined that the aggregate amount of Mr. Klappa’s direct compensation (as opposed to each individual component of direct compensation) should be substantially the same as it was at the time of his retirement in 2016. Therefore, the Compensation Committee set Mr. Klappa’s 2018 annual base salary at $1,425,000 and his annual incentive plan target at 120% of base salary, the same target he was receiving at the time of his retirement in 2016. The Committee then awarded Mr. Klappa long-term incentive compensation at a level that was lower than he was receiving in 2016, so that the total value of direct compensation Mr. Klappa received would be substantially equal to his 2016 compensation levels and at or near the 2018 median for overall compensation.

Mr. Kuester had an ongoing consulting relationship with the Company following his retirement in 2013 pursuant to which he periodically advised on WEC Energy Group’s capital program. Due to Mr. Leverett’s medical leave beginning in October 2017, and in order to provide for continuity and dedicated oversight of the Company’s significant capital program during Mr. Leverett’s absence, Mr. Kuester’s consulting duties significantly increased at the end of 2017. This substantial increase in duties resulted in a significant increase in payments under his prior consulting agreement, which remained in effect until Mr. Kuester agreed to return to the Company and assume the position of Senior Executive Vice President effective March 1, 2018. The Compensation Committee determined that the aggregate amount of Mr. Kuester’s direct compensation as Senior Executive Vice President should be substantially the same as it was at the time he retired as Executive Vice President from the Company in 2013, recognizing that he was assuming additional responsibilities from those he held prior to his retirement in 2013. As a result, the Committee set Mr. Kuester’s 2018 annualized base salary and target award under the STPP at $765,000 and 80% of base salary, respectively. Mr. Kuester’s long-term incentive compensation was set slightly below the level he was receiving when he retired in 2013. Mr. Kuester’s responsibilities include oversight of the development and execution of the Company’s capital plan.

MR. LEVERETT’S 2018 COMPENSATION

We compensated Mr. Leverett pursuant to the Company’s standard medical leave policy until he resigned as President of WEC Energy Group effective October 10, 2018. At the time 2018 compensation levels were being determined, we did not know how long Mr. Leverett would be on medical leave, but fully expected that he would return to the role of Chief Executive Officer. As a result, the Compensation Committee evaluated Mr. Leverett’s 2017 performance up to the start of his medical leave in October 2017, and determined that he had earned a standard cost-of-living base salary increase of 3% for 2018. In addition, Mr. Leverett’s target award level under the STPP remained unchanged at 125% of base salary. In accordance with the Company’s standard benefit plans and policies applicable to all management employees, Mr. Leverett received an award under the STPP pro-rated to his number of days of service in 2018 prior to his resignation as President. In addition, Mr. Leverett received a customary long-term incentive award in accordance with the Company’s standard practices for those on medical leave. Upon his resignation as President, Mr. Leverett began receiving payments under other applicable benefit plans of the Company in which he was already a participant and under which he was eligible to receive payments.



WEC Energy Group	P-40	2019 Proxy Statement

ANNUAL BASE SALARY

The annual base salary component of our executive compensation program provides each executive officer with a fixed level of annual cash compensation. We believe that providing annual cash compensation through a base salary is an established market practice and is a necessary component of a competitive compensation program.

Based upon the market data analyzed by FW Cook, we generally target base salaries to be at or near the market median for each NEO. However, the Compensation Committee may, in its discretion, set base salaries at a different amount when the Compensation Committee deems it appropriate.

Actual salary determinations are made taking into consideration factors such as the relative levels of individual experience, performance, responsibility, and contribution to the results of the Company’s operations. At the beginning of each year, our CEO develops a list of goals for WEC Energy Group and our employees to achieve during the upcoming year. At the end of the year, our CEO measures the performance of the Company against each stated goal and reports the results to the Board. The Compensation Committee then takes the Company’s performance into consideration when establishing our CEO’s compensation for the upcoming year. Our CEO undertakes a similar process with the NEOs, who develop individual goals related to the achievement of the Company’s goals developed by our CEO. At the end of the year, each officer’s performance is measured against these goals. Compensation recommendations and determinations for the upcoming year for each executive officer also take into consideration the level of such performance.

For information about Messrs. Klappa’s, Kuester’s and Leverett’s base salary, see the discussion about each individual’s compensation above.

With respect to the remaining NEOs, in December 2017, Mr. Klappa recommended an annual base salary to the Compensation Committee based upon a review of the market compensation data provided by FW Cook and the factors described above. The Compensation Committee approved the recommendations, which represented an average increase in annual base salary of approximately 3% for Messrs. Fletcher and Keyes, and Ms. Kelsey, and an increase in annual base salary of approximately 12% for Mr. Lauber.

In recognition of Mr. Fletcher’s appointment to President of WEC Energy Group in October 2018, the Compensation Committee increased his annual base salary to $700,000.

Upon his appointment as Executive Vice President and Chief Financial Officer in April 2016, Mr. Lauber’s base salary was initially set below market median because of how significant such an increase would have been in order to bring his salary at or near median. As we previously reported, the Compensation Committee’s intent was to increase Mr. Lauber’s salary in multiple steps to eventually move it to market median. In line with this intent, the Compensation Committee increased Mr. Lauber’s base salary by 12% effective January 1, 2018, and again by 7.9% effective July 29, 2018, to provide an aggregate base salary of $600,000 in 2018, putting his salary at market median. The annual base salary of each NEO (other than Mr. Klappa, whose total direct compensation was determined as described above) was at or near the market median.

ANNUAL CASH INCENTIVE COMPENSATION

We provide annual cash incentive compensation through our Short-Term Performance Plan (“STPP”). The STPP provides for annual cash awards to NEOs based upon the achievement of pre-established stockholder-, customer-, and employee- focused objectives. All payments under the STPP are at risk. Payments are made only if performance goals are achieved, and awards may be less or greater than targeted amounts based upon actual performance. Payments under the STPP are intended to reward achievement of short-term goals that contribute to stockholder and customer value, as well as individual contributions to successful operations.

2018 Target Awards. Each year, the Compensation Committee approves a target level of compensation under the STPP for each of our NEOs. This target level of compensation is expressed as a percentage of base salary.

In October 2018, the target award level for Mr. Fletcher was increased to 90% of base salary in recognition of his appointment to President of WEC Energy Group. Therefore, Mr. Fletcher’s STPP payout level reflects a 70% target level for nine months and a 90% target level for three months.



WEC Energy Group	P-41	2019 Proxy Statement

The year-end 2018 target awards for each NEO (other than Messrs. Klappa, Kuester and Leverett, who are discussed above) are set forth in the chart below.



Executive Officer	Target STPP Award as a Percentage of Base Salary
Mr. Lauber	80%
Mr. Fletcher	90%
Ms. Kelsey	70%
Mr. Keyes	75%

The target award levels of each officer named in the table above reflect median incentive compensation practices as indicated by the market data.

For 2018, the possible payout for any NEO ranged from 0% of the target award to 210% of the target award, based upon performance.

2018 Financial Goals under the STPP. The Compensation Committee adopted the 2018 STPP with a continued principal focus on financial results. In December 2017, the Compensation Committee approved WEC Energy Group’s earnings per share (75% weight) and cash flow (25% weight) as the primary performance measures to be used in 2018. For those officers whose positions primarily relate to utility operations in Wisconsin (including Mr. Fletcher until he was appointed President of WEC Energy Group in October 2018) the Compensation Committee approved WEC Energy Group’s earnings per share (25% weight) and cash flow (25% weight), as well as aggregate net income of WEC Energy Group’s Wisconsin utility operations (50% weight), as the primary performance measures to be used in 2018. We believe earnings per share and cash flow are key indicators of financial strength and performance, and are recognized as such by the investment community. Utility net income is an important financial measure as it is an indicator of the return on equity earned by our utilities, and in order to meet our earnings per share targets it is important that our utilities earn at or close to their allowed rates of return.

In October 2018, the target award level for Mr. Fletcher was increased from 70% to 90% of base salary in recognition of his appointment to President of WEC Energy Group. Therefore, Mr. Fletcher’s STPP payout level is based upon a combination of (i) WEC Energy Group’s Wisconsin utility operations’ performance against their 2018 performance goals and (ii) WEC Energy Group’s performance against its 2018 performance goals.

In January 2018, the Compensation Committee approved the performance goals under the STPP for WEC Energy Group’s earnings per share as set forth in the chart below.



Earnings Per Share Performance Goal	Earnings Per Share CAGR	Payout Level
$3.19	3.2%	25%
$3.21	3.9%	50%
$3.24	5.0%	100%
$3.26	5.5%	135%
$3.30	6.8%	200%

If the Company’s performance falls between these levels, the payout level with respect to earnings per share is determined by interpolating on a straight line basis the appropriate payout level.

Although WEC Energy Group achieved earnings per share of $3.79 based on generally accepted accounting principles ("GAAP"), because this result included a one-time adjustment of $0.65 per share related to the impact of the Tax Cuts and Jobs Act of 2017 (the "Tax Legislation"), the Compensation Committee determined that the appropriate earnings per share measure on which to base the 2018 performance goals was WEC Energy Group's 2017 adjusted earnings per share of $3.14.

The Company’s growth plan, which has been communicated to the public, calls for a long-term compound annual growth rate (“CAGR”) in earnings per share of 5.0% to 7.0%. At the time the Compensation Committee was establishing targets for 2018, this CAGR was measured off a 2017 base of $3.09 per share, which represented the mid-point of the 2017 annual earnings guidance. We believe that this CAGR, plus our continued growth in dividends, supports a premium valuation as compared to the Company’s peers. Therefore, the Compensation Committee tied the target (100%) payout level to achievement of the low end of the target CAGR range (5.0%), and the above-target payout level to achievement of a 5.5% CAGR. The Compensation Committee tied the maximum payout level (200%) to achievement of a 6.8% CAGR.

In January 2018, the Compensation Committee approved the initial performance goals under the STPP for WEC Energy Group’s cash flow. At that time, management informed the Compensation Committee that it might recommend new cash flow



WEC Energy Group	P-42	2019 Proxy Statement

performance goals for consideration later in the year based upon the impact of the Tax Legislation and voluntary contributions to subsidiary pension plans. During 2018, WEC Energy Group returned $100 million to customers related to the impacts of the Tax Legislation and one of the Company’s utility subsidiaries made a voluntary contribution of $60 million to its pension plan. As a result, in October 2018, the Compensation Committee revised the cash flow performance goals, which are set forth in the chart below ($ in millions).



Cash Flow	Payout Level
$1,700	25%
$1,750	50%
$1,800	100%
$1,850	135%
$1,950	200%

If the Company’s performance falls between these levels, the payout level with respect to cash flow is determined by interpolating on a straight-line basis the appropriate payout level.

The Compensation Committee based the cash flow performance level goals on WEC Energy Group’s funds from operations (“FFO”). FFO is calculated by taking “cash provided by operating activities” and eliminating certain accruals and other items related to capital spending. GAAP requires these items to be recorded as part of cash from operations, but management views them as related to the Company’s capital expenditure program. The Compensation Committee believes that basing the cash flow performance goals on FFO provides a more accurate measurement of the cash generated by the Company’s operations that is available for capital investment, which is the Company’s primary driver for earnings growth. FFO is not a measure of financial performance under GAAP, and the Company's calculation may differ from similarly titled measures used by other companies or securities rating agencies.

In January 2018, the Compensation Committee approved the performance goals under the STPP for the Wisconsin utilities’ net income (based upon WEC Energy Group’s earnings per share performance goals) as set forth in the chart below ($ in millions).



Net Income	Weighted Return on Equity	Payout Level
$588	9.92%	25%
$593	10.00%	50%
$598	10.08%	100%
$603	10.16%	135%
$613	10.32%	200%

2018 Financial Performance under the STPP. In January 2019, the Compensation Committee reviewed our actual performance for 2018 against the financial and operational performance goals established under the STPP, subject to final audit.

WEC Energy Group’s 2018 financial performance satisfied the maximum payout level established for earnings per share, cash flow, and net income for the Wisconsin utilities. WEC Energy Group’s earnings per share were $3.34 for 2018. WEC Energy Group’s cash flow, based on FFO, was $2,372 million, and the Wisconsin utilities’ net income was $617 million for 2018. Our cash flow result is not a measure of financial performance under GAAP.

By satisfying the maximum payout level with respect to these financial measures, the NEOs earned 200% of the target award from the financial goal component of the STPP.

2018 WEC Energy Group Operational Goals and Performance under the STPP. Similar to prior years, in December 2017 and January 2018, the Compensation Committee also approved operational performance measures and targets under the STPP. Annual incentive awards could be increased or decreased by up to 10% of the actual award based upon WEC Energy Group’s performance in the operational areas of customer satisfaction (5% weight), safety (2.5% weight), and supplier and workforce diversity (2.5% weight). The Compensation Committee recognizes the importance of strong operational results to the success of the Company and has identified these three operational areas in particular as being critical to that success.

The Compensation Committee measures customer satisfaction levels based upon the results of surveys that an independent third party conducts of customers who had direct contact with our utilities during the year, which measure (i) customers’ satisfaction with the respective utility overall, and (ii) customers’ satisfaction with respect to the particular transactions with the applicable utility. Safety is measured based upon performance against the number of lost time injuries and OSHA recordable incidents, as well as the number of Near Miss/Unsafe Condition ("NMUC") Reports filed. NMUC reporting is designed to proactively identify and take action on potential safety risks before an incident occurs (unsafe conditions); and to learn from near-miss incidents that have occurred, but did not result in an injury or damage.



WEC Energy Group	P-43	2019 Proxy Statement

The operational performance measures are based upon recommendations from management and take into consideration both current year performance and our longer-term objective of achieving top quartile performance of all of our principal utilities. The Compensation Committee reviews management's recommendations and may make adjustments to the performance measures if it feels changes are necessary. The following table provides the operational goals approved by the Compensation Committee for 2018, as well as WEC Energy Group’s performance against these goals:



Operational Measure	Below Goal	Goal	Above Goal	Final Result
Customer Satisfaction Percentage of "Highly Satisfied":	-5.00%	0.00%	+5.00%
Company	<75.7%	75.7% - 78.8%	>78.8%	79.2%
Transaction	<79.2%	79.2% - 82.2%	>82.2%	82.4%
Safety:	-2.50%	0.00%	+2.50%
Lost Time Injury - Incidents	>67	39 - 67	<39	55
OSHA Recordable - Incidents	>206	135 - 206	<135	193
Near Miss / Unsafe Condition Reports	<20,100	20,100 - 23,992	>23,992	25,146
Diversity:	-2.50%	0.00%	+2.50%
Supplier ($ in Millions)	<196.1	196.1 - 231.7	>231.7	263.1
Workforce - Assessment	Not Met	Met	Exceeded	Met

Based on the operational results listed in the table above, WEC Energy Group’s performance with respect to operational goals generated a 7.08% increase to the compensation awarded under the STPP for 2018.

2018 Wisconsin Utilities Operational Goals and Performance under the STPP. For those officers whose positions in 2018 primarily related to utility operations in Wisconsin, STPP awards could be increased or decreased by up to 10% based upon performance in the operational areas of customer satisfaction (5% weight), safety (2.5% weight), and supplier diversity (1.25% weight) for WEC Energy Group’s Wisconsin utility operations, as well as WEC Energy Group’s performance in the operational area of workforce diversity (1.25% weight).

The following table provides the operational goals approved by the Compensation Committee for 2018 for WEC Energy Group’s Wisconsin utility operations, as well as the Company’s performance against these goals:



Operational Measure	Below Goal	Goal	Above Goal	Final Result
Customer Satisfaction Percentage of "Highly Satisfied":	-5.00%	0.00%	+5.00%
Company	<78.8%	78.8% - 81.7%	>81.7%	81.8%
Transaction	<82.0%	82.0% - 85.1%	>85.1%	84.7%
Safety:	-2.50%	0.00%	+2.50%
Lost Time Injury - Incidents	>25	13 - 25	<13	31
OSHA Recordable - Incidents	>105	65 - 105	<65	109
Near Miss / Unsafe Condition Reports	<14,538	14,538 - 17,792	>17,792	15,012
Diversity:	-2.50%	0.00%	+2.50%
Supplier ($ in Millions)	<105.0	105.0 - 120.0	>120.0	138.2
Workforce - Assessment	Not Met	Met	Exceeded	Met

Based upon the operational results listed in the table above, the Wisconsin utilities’ performance with respect to operational goals generated a 2.08% increase to the compensation awarded under the STPP for 2018.

The Compensation Committee retains the right to exercise discretion in adjusting awards under the STPP when it deems appropriate, but did not factor individual contributions into determining the amount of the awards for the NEOs for 2018. Because the Company’s performance against the financial and operational goals resulted in significant STPP awards in 2018, the Compensation Committee determined that no further adjustments based upon individual contributions or otherwise were appropriate.



WEC Energy Group	P-44	2019 Proxy Statement

Based upon the Company’s performance against the financial and operational goals established by the Compensation Committee, Mr. Klappa received annual incentive cash compensation under the STPP of $3,541,124 for 2018. This represented 248% of his annual base salary. Messrs. Lauber, Fletcher, Kuester, and Keyes, and Ms. Kelsey, each received annual cash incentive compensation for 2018 under the STPP equal to 166%, 157%, 198%, 155%, and 145% of their respective annual base salaries, representing 207.08% of the target award for each officer, other than Mr. Fletcher, whose incentive compensation payout was 204.05% of his target award. Mr. Fletcher’s STPP payout is based upon a combination of (i) the number of days he served as President of WEC Energy Group with a target award of 90% of base pay multiplied by WEC Energy Group’s payout level of 207.08% of his target award and (ii) the number of days he served as President of WEC Energy Group’s Wisconsin utility operations with a target award of 70% of base salary multiplied by WEC Energy Group’s Wisconsin utility operations' payout level of 202.08% of his target award. For additional information about Messrs. Klappa’s, Kuester’s, and Leverett’s receipt of incentive compensation under the STPP, see “Determination of Messrs. Klappa’s and Kuester’s 2018 Compensation” and "Mr. Leverett’s 2018 Compensation" on page P-40.

LONG-TERM INCENTIVE COMPENSATION

The Compensation Committee administers our 1993 Omnibus Stock Incentive Plan, amended and restated effective January 1, 2016, which is a stockholder-approved, long-term incentive plan designed to link the interests of our executives and other key employees to creating long-term stockholder value. It allows for various types of awards tied to the performance of our common stock, including stock options, stock appreciation rights, and restricted stock. The Compensation Committee also administers the WEC Energy Group Performance Unit Plan, under which the Compensation Committee may award performance units. The Compensation Committee primarily uses (1) performance units, including dividend-equivalents, (2) stock options, and

(3) restricted stock to deliver long-term incentive opportunities.

Performance Units. Each year, the Compensation Committee makes annual grants of performance units under the Performance Unit Plan. The performance units are designed to provide a form of long-term incentive compensation that aligns the interests of management with those of a typical utility stockholder who is focused not only on stock price appreciation but also on dividends. Payouts are based upon the Company’s level of “total stockholder return” (stock price appreciation plus reinvested dividends) in comparison to a peer group of companies over a three-year performance period, and may be adjusted based upon the Company’s performance against one or more Additional Performance Measures. The performance units are settled in cash.

Selection of Additional Performance Measure(s). “Additional Performance Measure” is defined as the performance criterion or criteria (if any) that the Compensation Committee selects, in its sole discretion, based upon the attainment of specific levels of performance by WEC Energy Group. Performance units vest in an amount between 0% and 175% of the target award based upon WEC Energy Group’s comparative total stockholder return over a three-year performance period. However, the vesting percentage may be adjusted based upon WEC Energy’s performance against the Additional Performance Measure(s). The Additional Performance Measure(s), if any, must be selected by the Compensation Committee at the beginning of the three-year performance period. For each year during the performance period, the Compensation Committee will select the target(s) for the Additional Performance Measure(s) and the potential adjustment to the vesting percentage for that year based upon achievement of the Additional Performance Measure(s) relative to the selected target(s). The actual adjustment, if any, to the vesting percentage based upon the Additional Performance Measure(s) will be determined annually. In no event will any adjustment cause the vesting percentage over the three-year performance period to be less than zero.

Short-Term Dividend Equivalents. We increase the number of unvested performance units as of any date that we declare a cash dividend on our common stock by the amount of short-term dividend equivalents a participant is entitled to receive. Short-term dividend equivalents are calculated by multiplying (a) the number of unvested performance units held by a plan participant as of the related dividend record date by (b) the amount of cash dividend payable by the Company on a share of common stock; and (c) dividing the result by the closing price for a share of the Company's common stock on the dividend payment date. In effect, short-term dividend equivalents are credited and accumulated as reinvested dividends on each performance unit so that the performance units and accumulated dividends will be paid out at the end of the three-year performance period, rather than paying out the dividend equivalents annually on unearned performance units.

Short-term dividend equivalents are treated as additional unvested performance units and are subject to the same vesting, forfeiture, payment, termination, and other terms and conditions as the original performance units to which they relate. In addition, outstanding short-term dividend equivalents are treated as unvested performance units for purposes of calculating future short-term dividend equivalents.

Stock Options. Each year, the Compensation Committee also makes annual stock option grants as part of our long-term incentive program. These stock options have an exercise price equal to the fair market value of our common stock on the date of grant and expire on the 10th anniversary of the grant date. Since management benefits from a stock option award only to the extent our stock price appreciates above the exercise price of the stock option, stock options align the interests of management with those of our stockholders in attaining long-term stock price appreciation.



WEC Energy Group	P-45	2019 Proxy Statement

Restricted Stock. The Compensation Committee also awards restricted stock as part of the long-term incentive plan, consistent with market practice. Similar to performance units, restricted stock aligns the interests of management with a typical utility stockholder who is focused on stock price appreciation and dividends.

Aggregate 2018 Long-Term Incentive Awards. Generally, when establishing the target value of long-term incentive awards and the appropriate mix of performance units, stock options, and restricted stock for each NEO, the Compensation Committee reviews the market compensation data and analysis provided by FW Cook. Based upon FW Cook’s analysis, for 2018 the Compensation Committee determined that the long-term incentive awards would be weighted 65% performance units, 20% stock options, and 15% restricted stock for Messrs. Lauber, Fletcher, Leverett, and Keyes, and Ms. Kelsey. Target values also were presented to and approved by the Compensation Committee in December 2017.

With respect to Messrs. Klappa and Kuester, after consultation with FW Cook, the Compensation Committee determined that their long-term incentive awards would be weighted 80% restricted stock and 20% stock options. At the time, the Committee recognized that Messrs. Klappa’s and Kuester’s tenure with the Company would be significantly shorter than the other executive officers. Since the vesting percentage of performance units is based upon WEC Energy Group’s total stockholder return over a three-year period, the Compensation Committee did not believe that performance units would accurately reflect the contributions of Messrs. Klappa and Kuester to the success of the Company over a shorter period of time.

Based upon the market data provided by FW Cook, we target the long-term incentive award to be at or near the market median value of long-term incentive compensation for each executive officer’s position. All of the NEOs’ long-term incentive awards were within this target range for 2018. For additional information on Messrs. Klappa’s, Kuester’s and Leverett’s awards, see “Determination of Messrs. Klappa’s and Kuester’s 2018 Compensation” and “Mr. Leverett’s 2018 Compensation” on page P-40.

2018 Stock Option Grants. In December 2017, the Compensation Committee approved the grant of stock options to each of our NEOs (other than Mr. Kuester) and established an overall pool of options that were granted to approximately 200 other employees. The option grants to the NEOs (other than Mr. Kuester) were made effective January 2, 2018, the first trading day of 2018. The options were granted with an exercise price equal to the average of the high and low prices reported on the NYSE for shares of WEC Energy Group common stock on the grant date. The options were granted in accordance with our standard practice of making annual stock option grants effective on the first trading day of each year, and the timing of the grants was not tied to the timing of any release of material information. The Compensation Committee granted Mr. Kuester’s stock options effective March 1, 2018, the date he commenced service as Senior Executive Vice President of WEC Energy Group.

These stock options have a term of 10 years and vest 100% on the third anniversary of the date of grant. The vesting of the stock options may be accelerated in connection with a change in control or an executive officer’s termination of employment under certain circumstances. See “Potential Payments upon Termination or Change in Control” beginning on page P-63 for additional information. Subject to the limitations of the 1993 Omnibus Stock Incentive Plan, the Compensation Committee has the power to amend the terms of any option (with the participant’s consent). However, the Committee may not reduce the exercise price of existing options or cancel outstanding options and grant replacement options having a lower exercise price without stockholder approval.

For purposes of determining the appropriate number of options to grant to a particular NEO, the value of an option was determined based upon the Black-Scholes option pricing model. We use the Black-Scholes option pricing model for purposes of the compensation valuation. The following table provides the number of options granted to each NEO in 2018:



Executive Officer	Options Granted
Mr. Klappa	115,960
Mr. Lauber	26,465
Mr. Fletcher	16,055
Mr. Kuester	50,055
Ms. Kelsey	18,380
Mr. Leverett	120,925
Mr. Keyes	24,825

For financial reporting purposes, the stock options granted on January 2, 2018 had a grant date fair value of $8.68 per option for Messrs. Lauber, Leverett, and Keyes, and Ms. Kelsey, and a grant date fair value of $6.84 for Messrs. Klappa and Fletcher, who are considered to be “retirement eligible.” The stock options granted on March 1, 2018 to Mr. Kuester, who is also “retirement eligible,” had a grant date fair value of $5.95. The options granted to Messrs. Klappa, Fletcher and Kuester are presumed to have a shorter expected life, which results in a lower option value.



WEC Energy Group	P-46	2019 Proxy Statement

2018 Restricted Stock Awards. In December 2017, the Compensation Committee also approved the grant of restricted stock to each of our NEOs (other than Mr. Kuester) and established an overall pool of restricted stock that was granted to approximately 200 other employees. The grants to the NEOs were also made effective January 2, 2018 (other than Mr. Kuester). Mr. Kuester’s grant of restricted stock was made effective March 1, 2018. Other than the shares granted to Messrs. Klappa and Kuester, the restricted stock vests in three equal annual installments beginning on January 2, 2019. The shares of restricted stock granted to Messrs. Klappa and Kuester vest in full on the one year anniversary of the grant date, reflecting the shorter tenure the Committee expected for Messrs. Klappa and Kuester.

The vesting of the restricted stock may be accelerated in connection with a termination of employment due to a change in control, death or disability, or by action of the Compensation Committee. Messrs. Klappa’s and Kuester’s restricted stock also fully vested if they resigned for “good reason,” defined as a material diminution in their authority, duties or responsibilities, including, but not limited to, the Company’s appointment of a successor Chief Executive Officer. The Compensation Committee wanted to appropriately incentivize Messrs. Klappa and Kuester to return to the Company while Mr. Leverett recovered from his stroke. See “Potential Payments upon Termination or Change in Control” beginning on page P-63 for additional information. Tax withholding obligations related to vesting may be satisfied, at the option of the executive officer, by withholding shares otherwise deliverable upon vesting or by cash. The NEOs have the right to vote the restricted stock and to receive cash dividends when the Company pays a dividend to our stockholders.

For purposes of determining the appropriate number of shares of restricted stock to grant to a particular NEO, the Compensation Committee used a value of $68.39 per share. This value was based upon the volume weighted price of WEC Energy Group’s common stock for the ten trading days beginning on December 4, 2017, and ending on December 15, 2017. The Compensation Committee uses the volume-weighted price in order to minimize the impact of day-to-day volatility in the stock market.

The measurement period is customarily close to the grant date in order to shorten the timeframe between the calculation of the awards and the actual grant date. The following table provides the number of shares of restricted stock granted to each NEO in 2018:



Executive Officer	Restricted Stock Granted
Mr. Klappa	57,008
Mr. Lauber	2,439
Mr. Fletcher	1,479
Mr. Kuester	24,609
Ms. Kelsey	1,695
Mr. Leverett	11,145
Mr. Keyes	2,289

2018 Performance Units. In 2018, the Compensation Committee granted performance units to each of our NEOs (other than Messrs. Klappa and Kuester) and approved a pool of performance units that were granted to approximately 200 other employees. With respect to the 2018 performance units, the amount of the benefit that ultimately vests will be dependent upon the Company’s total stockholder return over a three-year period ending December 31, 2020, as compared to the total stockholder return of the custom peer group described below. Total stockholder return is the calculation of total return (stock price appreciation plus reinvestment of dividends) based upon an initial investment of $100 and subsequent $100 investments at the end of each quarter during the three-year performance period. However, the vesting percentage may be adjusted based upon WEC Energy Group’s performance against the Additional Performance Measure. For the 2018 performance unit awards, the Compensation Committee selected performance against the weighted average authorized return on equity of all WEC Energy Group’s utility subsidiaries as the Additional Performance Measure.

Upon vesting, the performance units will be settled in cash in an amount determined by multiplying the number of performance units that have vested by the closing price of the Company’s common stock on the last trading day of the performance period.

The 2018 performance unit peer group against which WEC Energy Group's performance will be measured includes:



• Alliant Energy Corporation	• DTE Energy Co.	• FirstEnergy Corp.	• SCANA Corporation
• Ameren Corporation	• Duke Energy Corp.	• NiSource Inc.	• The Southern Company
• American Electric Power Company	• Edison International	• OGE Energy Corp.	• Xcel Energy Inc.
• CMS Energy Corporation	• Eversource Energy	• PG&E Corporation
• Consolidated Edison, Inc.	• Evergy, Inc.	• Pinnacle West Capital Corp.



WEC Energy Group	P-47	2019 Proxy Statement

The peer group is chosen by the Compensation Committee, based upon management’s recommendation and with the concurrence of FW Cook. This peer group was chosen because we believe these companies are similar to WEC Energy Group in terms of business model and long-term strategies, with a primary focus on regulated utility operations rather than a non-regulated business model. There is significant overlap between the performance unit peer group and the comparison group developed by FW Cook for purposes of benchmarking compensation levels. However, there are several companies that are different among the two groups because FW Cook places significant weight on the financial metrics of the companies included in its comparison group, whereas we focus more on operational measures for the performance unit peer group.

The required percentile ranking for total stockholder return and the applicable vesting percentage are set forth in the chart below.



Performance Percentile Rank	Vesting Percent
< 25^th Percentile	0%
25^th Percentile	25%
Target (50^th Percentile)	100%
75^th Percentile	125%
90^th Percentile	175%

If the Company’s rank is between the benchmarks identified above, the vesting percentage will be determined by interpolating on a straight line basis the appropriate vesting percentage. Unvested performance units generally are immediately forfeited upon a NEO’s cessation of employment with WEC Energy Group prior to completion of the three-year performance period. However, the performance units will vest immediately at the target 100% rate upon the termination of the NEO’s employment (1) by reason of disability or death or (2) after a change in control of WEC Energy Group. In addition, a prorated number of performance units (based upon the target 100% rate) will vest upon the termination of employment of the NEO by reason of retirement prior to the end of the three-year performance period.

In response to feedback we received from stockholders, the Compensation Committee amended the Performance Unit Plan, effective January 1, 2017, to provide for an Additional Performance Measure. For the 2018 performance unit awards, the Additional Performance Measure is the weighted average authorized return on equity (“ROE”) of all WEC Energy Group’s utility subsidiaries. In order for WEC Energy Group to meet its earnings per share targets, it is important that our utilities earn at or close to their allowed rates of return. The Company’s performance against this measure may increase or decrease the vesting percentage of the performance units up to 10% over the three-year performance period. For 2018, the ROE targets and potential adjustments were set as follows:



If Actual Annual ROE is	The Annual Adjustment is	ROE Ranges
≤ 20 bp below the Authorized ROE	+ 3.33%	≥ 9.76%
21 - 30 bp below the Authorized ROE	0%	9.66% - 9.75%
> 30 bp below the Authorized ROE	(3.33)%	< 9.66%

These are the same ROE targets and potential adjustments that we used in connection with the Additional Performance Measure for the 2017 performance unit awards, which was the first year we included an Additional Performance Measure.

WEC Energy Group’s utility subsidiaries achieved a weighted average authorized ROE of 10.38% for 2018. This resulted in a 3.33% increase in the vesting percentage of the performance units awarded in January 2018 and January 2017. For purposes of determining the appropriate number of performance units to grant to a particular NEO, the Compensation Committee used a value of $68.39 per unit, the same value used for the restricted stock granted in January 2018.

The following table provides the number of performance units granted to each NEO effective January 2, 2018, at the 100% target level:



Executive Officer	Performance Units Granted
Mr. Klappa	—
Mr. Lauber	10,570
Mr. Fletcher	6,415
Mr. Kuester	—
Ms. Kelsey	7,340
Mr. Leverett	48,305
Mr. Keyes	9,915



WEC Energy Group	P-48	2019 Proxy Statement

2018 Payouts under Previously Granted Long-Term Incentive Awards. In 2016, the Compensation Committee granted performance unit awards to participants in the Performance Unit Plan. The terms of the performance units granted in 2016 were substantially similar to those of the performance units granted in 2018 described above, except that the 2016 performance units did not have an Additional Performance Measure. The required percentile ranks for total stockholder return and related vesting schedule were identical to that of the 2018 performance units.

Payouts under the 2016 performance units were based upon our total stockholder return for the three-year performance period ended December 31, 2018 against the same group of peer companies used for the 2018 performance unit awards.

Our total stockholder return was at the 78^th percentile of the peer group for the three-year performance period ended

December 31, 2018, resulting in the performance units vesting at a level of 134.3%. The actual payouts were determined by multiplying the number of vested performance units by the closing price of our common stock ($69.26) on December 31, 2018, the last trading day of the performance period. The actual payout to each NEO (other than Messrs. Klappa and Kuester, and Ms. Kelsey, who did not have any 2016 performance units outstanding) is reflected in the “Option Exercises and Stock Vested for Fiscal Year 2018” table.

COMPENSATION RECOUPMENT POLICY

Accountability is a fundamental value of WEC Energy Group. To reinforce this value through the Company’s executive compensation program, the Compensation Committee has adopted a clawback policy that provides for the recoupment of incentive-based compensation in the event WEC Energy Group is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws (other than restatements permitted as a result of changes in accounting principles or interpretation). Pursuant to the policy, the Compensation Committee will recover from any current or former executive officer who has received incentive-based compensation during the three-year period preceding the date on which WEC Energy Group is required to prepare the accounting restatement, any portion of the incentive-based compensation paid in excess of what would have been paid to the executive officer under the restated financial results. The Company may also recover incentive-based compensation if an executive officer’s employment is terminated for cause, or the executive officer violates a noncompetition or other restrictive covenant.

STOCK OWNERSHIP GUIDELINES

The Compensation Committee believes that an important adjunct to the long-term incentive program is significant stock ownership by officers who participate in the program, including the NEOs. Accordingly, the Compensation Committee has implemented stock ownership guidelines requiring officers who participate in the long-term incentive program to hold an amount of Company common stock and other equity-related Company securities that varies depending upon such officer's level.

In addition to shares owned outright, holdings of each of the following are included in determining compliance with our stock ownership guidelines: restricted stock; WEC Energy Group phantom stock units held in the Executive Deferred Compensation Plan; WEC Energy Group stock held in WEC Energy Group's 401(k) plans; performance units at target; and shares held in a brokerage account, jointly with an immediate family member or in a trust.

The guidelines require each executive officer, including the NEOs, to acquire (generally within five years of appointment as an executive officer) and hold common stock and other equity-related securities of the Company having a minimum fair market value ranging from 250% to 600% of base salary. The Compensation Committee believes these stock ownership guidelines discourage unreasonable risk taking by Company officers.

The Compensation Committee annually reviews whether executive officers are in compliance with these guidelines. The last review was completed in October 2018. The Compensation Committee determined that all NEOs are in compliance, or making sufficient progress towards compliance, with these guidelines.

PROHIBITION ON HEDGING AND PLEDGING

WEC Energy Group’s Corporate Securities Trading Policy prohibits the use of any strategies or products, including derivatives and short-selling techniques, to hedge against potential changes in the value of WEC Energy Group’s common stock. The policy, which is applicable to all directors and employees of the Company, including the NEOs, also prohibits the holding of WEC Energy Group securities in a margin account, as well as the pledging of WEC Energy Group securities as collateral for a loan.

LIMITED TRADING WINDOWS

Officers, including the NEOs, other key employees, and the Company’s directors may only transact in WEC Energy Group securities during approved trading windows after satisfying mandatory pre-clearance requirements.



WEC Energy Group	P-49	2019 Proxy Statement

RETIREMENT PROGRAMS

We also maintain retirement plans in which our NEOs participate: a defined benefit pension plan of the cash balance type, a supplemental pension plan, individual letter agreements with some of the NEOs, and a 401(k) plan. We believe our retirement plans are a valuable benefit in the attraction and retention of our employees, including the NEOs. We believe that providing a foundation for long-term financial security for our employees, beyond their employment with the Company, is a valuable component of our overall compensation program which will inspire increased loyalty and improved performance. For more information about our retirement plans, see "Pension Benefits at Fiscal Year-End 2018" and "Retirement Plans."

Messrs. Klappa and Kuester had previously retired from the Company. For information regarding certain payments made to Messrs. Klappa and Kuester in connection with such retirements, see “Pension Benefits at Fiscal Year-End 2018.”

OTHER BENEFITS, INCLUDING PERQUISITES

We provide our executive officers, including the NEOs, with employee benefits and a limited number of perquisites. Except as specifically noted elsewhere in this proxy statement, the employee benefits programs in which executive officers participate (which provide benefits such as medical coverage, retirement benefits, annual contributions to a qualified savings plan, and moving and relocation costs) are generally the same programs offered to substantially all of the Company’s management employees.

The perquisites made available to executive officers include financial planning, membership in a service that provides health care and safety management when traveling outside the United States, reimbursement for expenses related to annual physical exam costs not covered by insurance, and limited spousal travel for business purposes. The Company also pays periodic dues and fees for club memberships for certain of the NEOs and other designated officers.

We customarily review market data regarding executive perquisite practices on an annual basis. Following our acquisition of Integrys Energy Group, the Compensation Committee undertook a thorough review of WEC Energy Group’s perquisite practices with FW Cook. At that time, FW Cook recommended to the Compensation Committee that the Company retain its package of perquisites. For 2018, the Compensation Committee again reviewed our package of perquisites with FW Cook and decided not to make any changes. WEC Energy Group has a legacy group of executives who are still eligible for gross-ups. We reimburse those executives for taxes paid on income attributable to the financial planning benefits provided to the executives only if the executive uses the Company’s identified preferred provider, AYCO. We believe the use of the preferred financial adviser provides administrative benefits and eases communication between Company personnel and the financial adviser.

We pay periodic dues and fees for certain club memberships as we have found that the use of these facilities helps foster better customer and community relationships. Officers, including the NEOs, are expected to use clubs for which the Company pays dues primarily for business purposes. We do not pay any additional expenses incurred for personal use of these facilities, and officers are required to reimburse the Company to the extent that it pays for any such personal use. The total annual club dues are included in the "Summary Compensation Table." We do not permit personal use of the airplane available to the Company. We do allow spousal travel if an executive’s spouse is accompanying the executive on business travel and the airplane is not fully utilized by Company personnel. There is no incremental cost to the Company for this travel, other than the reimbursement for taxes paid on imputed income attributable to the executives for this perquisite, as the airplane cost is the same regardless of whether or not an executive’s spouse travels. Any tax reimbursement is subject to the Company’s Tax Gross-Up Policy discussed below.

In addition, each of our executive officers is eligible to participate in an officer life insurance benefit. If an executive officer chooses to participate, upon such officer’s death while employed by the Company, a benefit is paid to his or her designated beneficiary in an amount equal to the value of three times the officer’s base salary at the time of death.

TAX GROSS-UP POLICY

The Compensation Committee adopted a formal policy that prohibits entry into any contract, agreement, or arrangement with any officer of the Company that obligates the Company to pay directly or reimburse the officer for any portion of the officer’s individual tax liability for benefits provided by the Company. Excluded from this policy are (1) agreements or arrangements entered into prior to December 2014 when the policy was adopted, (2) agreements or arrangements entered into prior to, and assumed by the Company in connection with, any merger or acquisition, or (3) plans or policies applicable to Company employees generally.

This policy formalized the Compensation Committee’s policy that had been in place since July 2011 to eliminate tax gross-ups on perquisites provided by the Company to its officers (except to officers who were already receiving gross-ups as of July 2011). Of the NEOs, Messrs. Lauber and Leverett were receiving gross-ups from the Company prior to July 2011.



WEC Energy Group	P-50	2019 Proxy Statement

In light of Mr. Klappa’s retirement in May 2016, and subsequent re-appointment as CEO in 2017, and Mr. Kuester’s retirement in January 2013 and subsequent appointment as Senior Executive Vice President in 2018, both Mr. Klappa and Mr. Kuester are deemed new employees for benefits purposes and are not eligible to receive gross-ups.

SEVERANCE BENEFITS AND CHANGE IN CONTROL

Several years ago, the Compensation Committee determined that it would no longer offer severance and change in control benefits in employment agreements. Therefore, Messrs. Klappa, Lauber, Kuester, and Keyes, and Ms. Kelsey, have not entered into an employment agreement that provides for these benefits. However, they are eligible to participate in the Company’s Severance Pay Plan. Prior to that time, each of Messrs. Fletcher and Leverett entered into an employment agreement with the Company, which includes severance and change in control provisions. For a discussion of the severance and change in control benefits available under these agreements, and to our executive officers generally, see “Potential Payments upon Termination or Change in Control.”

In addition, our supplemental pension plan provides that in the event of a change in control, participants will be entitled to a lump sum payment of amounts due under the plan if employment is terminated within 18 months of the change in control.

IMPACT OF PRIOR COMPENSATION

The Compensation Committee does not believe it is appropriate to consider the amounts realized or realizable from prior incentive compensation awards when establishing future levels of short-term and long-term incentive compensation.

SECTION 162(m) OF THE INTERNAL REVENUE CODE

Certain components of the Company’s compensation program were designed to ensure the deductibility of compensation based on tax regulations in effect at the time the compensation was awarded, including Section 162(m). Section 162(m) of the Internal Revenue Code limits the deductibility of certain executives’ compensation that exceeds $1,000,000 per year. For tax years prior to 2018, compensation over $1,000,000 per year could be deducted by the Company if such compensation was performance-based under Section 162(m) and issued through a plan that had been approved by stockholders. Starting with compensation awarded in 2018, the Tax Cuts and Jobs Act of 2017 eliminated the performance-based compensation exception under 162(m) for compensation over $1,000,000.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.



	The Compensation Committee

	John F. Bergstrom, Committee Chair Thomas J. Fischer Ulice Payne, Jr.



WEC Energy Group	P-51	2019 Proxy Statement

EXECUTIVE COMPENSATION TABLES

The following table summarizes total compensation awarded to, earned by, or paid to WEC Energy Group’s Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO"), and each of the other individuals identified in the table below (the “NEOs”).

SUMMARY COMPENSATION TABLE



							(8)
Name and Principal Position	Year	Salary	Bonus	⁽⁵⁾ Stock Awards	⁽⁶⁾ Option Awards	⁽⁷⁾ Non-Equity Incentive Plan Compensation	Change in Pension Value and Nonqualified Deferred Compensation Earnings	^(9)(10) All Other Compensation	Total	Total Without Change in Pension Value
Name and Principal Position		($)	($)	($)	($)	($)	($)	($)	($)	($)
Gale E. Klappa⁽¹⁾ Executive Chairman	2018	1,425,000	—	3,763,383	793,166	3,541,124	158,568	181,752	9,862,993	9,862,993
	2017	2,225,000	—	250,012	—	—	2,529,057	27,102	5,031,171	2,593,579
	2016	589,043	—	7,427,755	816,752	1,179,632	925,719	210,435	11,149,336	10,250,269
Scott J. Lauber Senior Executive Vice President, CFO and Treasurer	2018	574,711	—	858,790	229,716	952,418	22,857	76,186	2,714,678	2,714,678
	2017	467,321	—	534,890	137,001	764,441	93,343	66,124	2,063,120	1,977,525
	2016	351,784	—	158,886	38,371	513,010	65,818	38,116	1,165,985	1,103,685
J. Kevin Fletcher⁽¹⁾ President and Chief Executive Officer	2018	504,733	—	521,122	109,816	792,078	739,652	52,100	2,719,501	2,023,895
	2017	436,800	—	535,648	137,199	633,095	1,198,310	44,062	2,985,114	1,800,225
	2016	411,345	—	336,818	81,425	606,866	671,274	39,869	2,147,597	1,482,133
Frederick D. Kuester⁽²⁾ Senior Executive Vice President	2018	638,481	—	1,476,294	297,827	1,267,350	33,485	266,998	3,980,435	3,980,435


Margaret C. Kelsey⁽²⁾ Executive Vice President, General Counsel and Corporate Secretary	2018	515,000	—	596,445	159,538	746,535	41	88,223	2,105,782	2,105,782


Allen L. Leverett⁽³⁾ Former President	2018	980,235	—	3,924,592	1,049,629	2,400,040	2,595,024	390,357	11,339,877	8,783,390
	2017	1,161,000	—	4,034,706	1,033,362	3,018,251	4,224,896	170,022	13,642,237	9,437,265
	2016	941,667	—	2,939,251	769,144	2,162,593	4,549,812	140,512	11,502,979	6,963,294
J. Patrick Keyes⁽⁴⁾ Former Executive Vice President, Strategy	2018	579,676	—	805,647	215,481	900,309	137,664	75,557	2,714,334	2,609,178
	2017	562,792	—	920,228	235,718	885,736	122,780	73,214	2,800,468	2,682,669
	2016	546,400	—	889,965	215,067	904,320	111,973	73,034	2,740,759	2,630,909

Note: In order to show the effect that the year-over-year change in pension value had on total compensation, as determined under applicable SEC rules, we have included an additional column to show total compensation minus the change in pension value. The amounts reported in the Total Without Change in Pension Value column may differ substantially from the amounts reported in the Total column required under SEC rules and are not a substitute for total compensation. Total Without Change in Pension Value represents total compensation, as determined under applicable SEC rules, minus the change in pension value reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column. The change in pension value is subject to many external variables, such as interest rates, that are not related to Company performance. Therefore, we do not believe a year-over-year change in pension value is helpful in evaluating compensation for comparative purposes.

⁽¹⁾

Mr. Klappa retired as CEO on May 1, 2016, but continued to serve as the Non-Executive Chairman of the Company’s Board. After Mr. Leverett suffered a stroke in October 2017, the Company’s Board appointed Mr. Klappa Chairman and CEO while Mr. Leverett recovered from his stroke. Mr. Klappa served in these roles until February 1, 2019, at which time he began serving as Executive Chairman. Mr. Fletcher, who was appointed to serve as President of WEC Energy Group on October 9, 2018, was appointed President and Chief Executive Officer of the Company effective February 1, 2019.


⁽²⁾	Mr. Kuester, who was named Senior Executive Vice President effective March 1, 2018, and Ms. Kelsey, who was named Executive Vice President, General Counsel and Corporate Secretary effective January 1, 2018, became named executive officers in 2018. Therefore, no information has been provided for 2016 or 2017 for either officer.

⁽³⁾

Mr. Leverett, who had been recovering from a stroke he suffered in October 2017, resigned as President effective October 10, 2018. Pursuant to the Company’s standard medical leave policy, Mr. Leverett received 100% of his annual base salary until March 26, 2018, at which time he started receiving 80% of his base pay. Upon his resignation as President, Mr. Leverett began receiving payments under certain benefit plans of the Company, which are reflected in the All Other Compensation column. Mr. Leverett’s annual incentive award under the STPP, included in the Non-Equity Incentive Plan Compensation column, was prorated to reflect the number of days Mr. Leverett served as President in 2018.


⁽⁴⁾	Mr. Keyes resigned as Executive Vice President, Strategy and from his other officer positions with WEC Energy Group and its subsidiaries effective September 14, 2018, but remained an employee of the Company until January 4, 2019 to help transition his responsibilities.



WEC Energy Group	P-52	2019 Proxy Statement

⁽⁵⁾

The amounts reported reflect the aggregate grant date fair value, as computed in accordance with FASB ASC Topic 718 excluding estimated forfeitures, of performance units and/or restricted stock awarded to each NEO in the respective year for which such amounts are reported. The amounts reported for the performance units are based upon the probable outcome as of the grant date of associated performance and market conditions, and are consistent with our estimate, as of the grant date, of aggregate compensation cost to be recognized over the three-year performance period. The actual value received by the executives from these awards may range from $0 to greater than the reported amounts, depending upon the Company’s performance and the executive’s number of additional years of service with the Company.

The value of the performance unit awards as of the grant date, assuming achievement of the highest level of performance and excluding any performance units resulting from short-term dividend equivalents and the Additional Performance Measure, for each of Messrs. Lauber, Fletcher, Leverett, and Keyes, and Ms. Kelsey, is $1,221,145, $741,084, $5,580,512, $1,145,426, and $847,963, respectively, for the 2018 awards. The value of the performance unit awards as of the grant date, assuming achievement of the highest level of performance and excluding any performance units resulting from short-term dividend equivalents and the Additional Performance Measure, for each of Messrs. Lauber, Fletcher, Leverett, and Keyes, is $760,647, $761,697, $5,736,862, and $1,308,597, respectively, for the 2017 awards. See “Option Exercises and Stock Vested For Fiscal Year 2017” for the amount of the actual payout with respect to the 2016 award of performance units. Mr. Klappa’s 2016 grant of performance units vested pursuant to the terms of the Company’s Performance Unit Plan upon his retirement on May 1, 2016. Not included are the performance unit awards resulting from short-term dividend equivalents and/or the Additional Performance Measure that may increase or, in the case of the Additional Performance Measure, decrease these amounts.

⁽⁶⁾

The amounts reported reflect the aggregate grant date fair value, as computed in accordance with FASB ASC Topic 718 excluding estimated forfeitures, of options awarded to each NEO in the respective year for which such amounts are reported. The actual value received by the executives from these awards may range from $0 to greater than the reported amounts, depending upon Company performance. In accordance with FASB ASC Topic 718, we made certain assumptions in our calculation of the grant date fair value of the stock options. See “Stock Options” in Note 1(k) -- Stock-Based Compensation, in the Notes to Consolidated Financial Statements in our 2018 Annual Report on Form 10-K for a description of these assumptions. For 2018, the assumptions made in connection with the valuation of the stock options are the same as described in Note 1(k), except that the expected life of the options is 7.7 years for Messrs. Lauber, Leverett, and Keyes, and Ms. Kelsey, 4.3 years for Messrs. Klappa and Fletcher, and 3.5 years for Mr. Kuester. Mr. Kuester’s options were granted effective March 1, 2018 as compared to the grant date of January 2, 2018 for the other NEOs. The change in the expected life of the options as set forth in Note 1(k) resulted from the fact that Messrs. Klappa, Fletcher, and Kuester are “retirement eligible” as of the grant date, and Messrs. Lauber, Leverett, and Keyes, and Ms. Kelsey, were not, whereas the assumption described in Note 1(k) is a weighted average of all option holders.


⁽⁷⁾	Consists of the annual incentive compensation earned under WEC Energy Group’s STPP.

⁽⁸⁾

The amounts reported for 2018, 2017, and 2016 reflect the aggregate change in the actuarial present value of each applicable NEO’s accumulated benefit under all defined benefit plans from December 31, 2017 to December 31, 2018, December 31, 2016 to December 31, 2017, and December 31, 2015 to December 31, 2016, respectively. The amounts reported for all three years also include above-market earnings on compensation that is deferred by the NEOs into the Prime Rate Fund under WEC Energy Group’s Executive Deferred Compensation Plan. Above-market earnings represent the difference between the interest rate used to calculate earnings under the Plan and 120% of the applicable federal long-term rate prescribed by the Internal Revenue Code. The amounts earned for 2018 are shown below.



Name	Change in Pension Value	Non-Qualified Deferred Compensation Earnings	Total
Name	($)	($)	($)
Gale E. Klappa	—	158,568	158,568
Scott J. Lauber	—	22,857	22,857
J. Kevin Fletcher	695,606	44,046	739,652
Frederick D. Kuester	—	33,485	33,485
Margaret C. Kelsey	—	41	41
Allen L. Leverett	2,556,487	38,537	2,595,024
J. Patrick Keyes	105,156	32,508	137,664

For 2018, 2017, and 2016, the applicable discount rate used to value pension plan liabilities moved from 3.65% to 4.30%, 4.15% to 3.65%, and 4.45% to 4.15%, respectively. As the discount rate decreases, the Company’s pension funding obligation increases, and vice versa. The changes in the actuarial present values of the NEOs’ pension benefits do not constitute cash payments to the NEOs.

The pension values reported represent only WEC Energy Group’s obligation of the aggregate change in the actuarial present value of each NEO’s accumulated benefit under all defined benefit plans. Messrs. Klappa, Fletcher, Kuester, and Leverett are entitled to receive pension benefits from prior employers. To the extent such prior employers are unable to pay their pension obligations, WEC Energy Group may be obligated to pay the total amount.

⁽⁹⁾

During 2018, each NEO received financial planning services and the cost of an annual physical exam; Messrs. Klappa, Lauber, Fletcher, and Leverett were provided with membership in a service that provides healthcare and safety management when traveling outside the United States; Mr. Leverett received reimbursement for club dues. In 2018, the Company paid $78,181 for the lease of an apartment and related parking costs for Mr. Kuester as he transitioned from retirement back to Milwaukee, Wisconsin and into his new role as Senior Executive Vice President. Although Mr. Klappa utilized the benefit of spousal travel for business purposes in 2018, there was no associated cost to the Company as Mr. Klappa was not eligible to receive reimbursement for taxes paid on imputed income attributable to him for such travel.


⁽¹⁰⁾	For Mr. Klappa, the amount reported in All Other Compensation for 2018 includes $23,453 attributable to WEC Energy Group’s Directors’ Charitable Awards Program in connection with Mr. Klappa’s service on the Company’s Board. See “Director Compensation” for a description of the Directors’ Charitable Awards Program.



WEC Energy Group	P-53	2019 Proxy Statement

All Other Compensation for Messrs. Klappa, Lauber, Fletcher, Leverett, and Keyes, and Ms. Kelsey, for 2018 also consists of:


•	Employer matching of contributions into the WEC Energy Group 401(k) plan in the amount of $11,000 for Messrs. Klappa, Lauber, Fletcher, and Keyes; $10,625 for Messrs. Kuester and Leverett; and $10,434 for Ms. Kelsey;


•	Employer contributions into the WEC Energy Group 401(k) plan in the amount of $16,500 for Messrs. Klappa and Kuester, and Ms. Kelsey, and into the WEC Energy Group Non-Qualified Retirement Savings Plan in the amount of $69,000 for Mr. Klappa, $20,043 for Mr. Kuester, and $26,674 for Ms. Kelsey. These payments are in lieu of participation in the Company’s pension plan;

•

“Make-whole” payments under the Executive Deferred Compensation Plan that provides a match at the same level as the WEC Energy Group 401(k) plan (4% for up to 7% of wages) for all deferred salary and bonus not otherwise eligible for a match in the amounts of $46,000 for Mr. Klappa, $42,239 for Mr. Lauber, $33,700 for Mr. Fletcher, $16,914 for Ms. Kelsey, $143,089 for Mr. Leverett, and $46,557 for Mr. Keyes;


•	Payments in the amount of $128,817 to Mr. Kuester under a previous consulting agreement with WEC Energy Group for services he provided in January and February 2018, prior to being named Senior Executive Vice President;


•	Payments under a supplemental long-term benefit plan in the amount of $200,108 for Mr. Leverett; and


•	Tax reimbursements or “gross-ups” for all applicable perquisites in the amounts of $7,202 and $14,454 for Messrs. Lauber and Leverett, respectively.

Other Information

In recognition of his appointment as President and Chief Executive Officer of WEC Energy Group in February 2019, Mr. Fletcher’s 2019 annual base salary was increased to $1,004,000 and his target award under the STPP was increased to 125% of base salary. Additionally, in connection with Mr. Klappa’s appointment as Executive Chairman in February 2019, his 2019 annual base salary and STPP target were set at $1,000,000 and 100% of base salary, respectively.



WEC Energy Group	P-54	2019 Proxy Statement

GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR 2018

The following table shows additional data regarding incentive plan awards to the NEOs in 2018.



Name	Grant Date	Action Date ⁽¹⁾	Estimated Future Payouts Under Non-Equity Incentive Plan Awards ⁽²⁾			Estimated Future Payouts Under Equity Incentive Plan Awards ⁽³⁾			All Other Stock Awards: Number of Shares of Stock or Units ⁽⁴⁾ (#)	All Other Option Awards ⁽⁵⁾			Grant Date Fair Value of Stock and Option Awards ($)
Name	Grant Date	Action Date ⁽¹⁾	Threshold ($)	Target ($)	Maximum ($)	Threshold (#)	Target (#)	Maximum (#)		Number of Securities Underlying Options (#)	Exercise or Base Price ⁽⁶⁾ ($/Sh)	Closing Market Price ($/Sh)	Grant Date Fair Value of Stock and Option Awards ($)
Gale E. Klappa	1/18/18	—	427,500	1,710,000	3,591,000	—	—	—	—	—	—	—	—
	1/2/18	12/7/17	—	—	—	—	—	—	57,008	—	—	—	3,763,383
	1/2/18	12/7/17	—	—	—	—	—	—	—	115,960	66.015	65.77	793,166
Scott J. Lauber	1/18/18	—	114,980	459,920	965,832	—	—	—	—	—	—	—	—
	1/2/18	12/7/17	—	—	—	2,643	10,570	18,498	—	—	—	—	697,779
	1/2/18	12/7/17	—	—	—	—	—	—	2,439	—	—	—	161,011
	1/2/18	12/7/17	—	—	—	—	—	—	—	26,465	66.015	65.77	229,716
J. Kevin Fletcher	1/18/18	—	97,045	388,180	815,178	—	—	—	—	—	—	—	—
	1/2/18	12/7/17	—	—	—	1,604	6,415	11,226	—	—	—	—	423,486
	1/2/18	12/7/17	—	—	—	—	—	—	1,479	—	—	—	97,636
	1/2/18	12/7/17	—	—	—	—	—	—	—	16,055	66.015	65.77	109,816
Frederick D. Kuester	3/1/18	—	153,000	612,000	1,285,200	—	—	—	—	—	—	—	—
	3/1/18	2/23/18	—	—	—	—	—	—	24,609	—	—	—	1,476,294
	3/1/18	2/23/18	—	—	—	—	—	—	—	50,055	59.99	59.63	297,827
Margaret C. Kelsey	1/18/18	—	90,125	360,500	757,050	—	—	—	—	—	—	—	—
	1/2/18	12/7/17	—	—	—	1,835	7,340	12,845	—	—	—	—	484,550
	1/2/18	12/7/17	—	—	—	—	—	—	1,695	—	—	—	111,895
	1/2/18	12/7/17	—	—	—	—	—	—	—	18,380	66.015	65.77	159,538
Allen L. Leverett	1/18/18	—	289,743	1,158,973	2,433,843	—	—	—	—	—	—	—	—
	1/2/18	12/7/17	—	—	—	12,076	48,305	84,534	—	—	—	—	3,188,855
	1/2/18	12/7/17	—	—	—	—	—	—	11,145	—	—	—	735,737
	1/2/18	12/7/17	—	—	—	—	—	—	—	120,925	66.015	65.77	1,049,629
J. Patrick Keyes	1/18/18	—	108,689	434,757	912,990	—	—	—	—	—	—	—	—
	1/2/18	12/7/17	—	—	—	2,479	9,915	17,351	—	—	—	—	654,539
	1/2/18	12/7/17	—	—	—	—	—	—	2,289	—	—	—	151,108
	1/2/18	12/7/17	—	—	—	—	—	—	—	24,825	66.015	65.77	215,481


⁽¹⁾	Other than with respect to Mr. Kuester, on December 7, 2017, the Compensation Committee awarded the 2018 option, restricted stock, and performance unit grants effective the first trading day of 2018 (January 2, 2018). On February 23, 2018 the Compensation Committee awarded Mr. Kuester option and restricted stock grants effective March 1, 2018.


⁽²⁾	Non-equity incentive plan awards consist of annual incentive awards under WEC Energy Group’s STPP. For a more detailed description of the STPP, see the Compensation Discussion and Analysis.

⁽³⁾

Consists of performance units awarded under the WEC Energy Group Performance Unit Plan. WEC Energy Group’s Performance Unit Plan provides for short-term dividend equivalents. The number of performance units awarded will be increased as of any date that WEC Energy Group declares a cash dividend on its common stock by the amount of short-term dividend equivalents awarded. In effect, short-term dividend equivalents will be credited and accumulated as reinvested dividends on each performance unit so that the performance units and accumulated dividends will be paid out at the end of the performance units’ three-year performance period, contingent upon the Company’s performance. Therefore, the number of performance units reported at each of the threshold, target, and maximum levels in this table will increase by the number of short-term dividend equivalents earned. In addition, these amounts do not reflect any potential impact of the Company’s performance against the Additional Performance Measure. For a more detailed description of the performance units, short-term dividend equivalents and Additional Performance Measure, see the Compensation Discussion and Analysis.


⁽⁴⁾	Consists of restricted stock awarded under the 1993 Omnibus Stock Incentive Plan. For a more detailed description of the terms of the restricted stock, see the Compensation Discussion and Analysis.


⁽⁵⁾	Consists of non-qualified stock options to purchase shares of WEC Energy Group common stock pursuant to the 1993 Omnibus Stock Incentive Plan. For a more detailed description of the terms of the options, see the Compensation Discussion and Analysis.


⁽⁶⁾	The exercise price of the option awards is equal to the fair market value of WEC Energy Group’s common stock on the date of grant. Fair market value is the average of the high and low prices of WEC Energy Group common stock, which is listed on the New York Stock Exchange, reported by Bloomberg, LLP on the grant date.



WEC Energy Group	P-55	2019 Proxy Statement

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2018

The following table reflects the number and value of exercisable and unexercisable options as well as the number and value of other equity awards held by the NEOs at fiscal year-end 2018.



Name	Option Awards					Stock Awards
Name	Number of Securities Underlying Unexercised Options: Exercisable (#)	Number of Securities Underlying Unexercised Options: Unexercisable ⁽¹⁾ (#)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock that Have Not Vested ⁽²⁾ (#)	Market Value of Shares or Units of Stock that Have Not Vested ($)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ⁽³⁾ ($)
Gale E. Klappa	180,310	—	—	37.46	1/2/23	—	—	—	—
	302,535	—	—	41.025	1/2/24	—	—	—	—
	176,010	—	—	52.895	1/2/25	—	—	—	—
	190,830	—	—	50.925	1/4/26	—	—	—	—
	—	115,960	—	66.015	1/2/28	—	—	—	—
	—	—	—	—	—	59,866	4,146,319	—	—
Scott J. Lauber	3,650	—	—	34.875	1/3/22	—	—	—	—
	6,360	—	—	37.46	1/2/23	—	—	—	—
	9,560	—	—	41.025	1/2/24	—	—	—	—
	5,330	—	—	52.895	1/2/25	—	—	—	—
	—	6,720	—	50.925	1/4/26	—	—	—	—
	—	17,320	—	58.305	1/3/27	—	—	—	—
	—	26,465	—	66.015	1/2/28	—	—	—	—
	—	—	—	—	—	3,780	261,803	—	—
	—	—	—	—	—	—	—	14,202	983,631
	—	—	—	—	—	—	—	19,497	1,350,362
J. Kevin Fletcher	12,845	—	—	52.895	1/2/25	—	—	—	—
	—	14,260	—	50.925	1/4/26	—	—	—	—
	—	17,345	—	58.305	1/3/27	—	—	—	—
	—	16,055