H2O AMERICA (HTO)
Sector: Utilities
2026 Annual Meeting Analysis
H2O AMERICA · Meeting: May 13, 2026
Directors FOR
2
Directors AGAINST
7
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of Directors
Against Analysis
Mr. Guardino has served since 2020, fully overlapping the period during which HTO's stock declined 15.1% while the company's own compensation peers gained a median of 8.9% — a gap of 24 percentage points that exceeds the policy's 20-point trigger for directors serving during negative absolute returns, and the 5-year record does not clear the threshold either.
Ms. Hanley has served since 2019, fully overlapping the underperformance period; HTO's stock fell 15.1% over three years while the disclosed peer group gained a median of 8.9%, a 24-point gap that crosses the policy trigger, and the longer 5-year record similarly fails the threshold.
Ms. Hunt has served since 2019, well before the underperformance began, and the 24-point three-year gap versus company-disclosed peers exceeds the 20-point policy threshold; the five-year supplementary check also fails the threshold, so no downgrade to FOR applies.
Ms. Klein joined in 2021 and has served for more than 24 months, meaningfully overlapping the three-year underperformance window; the 24-point peer gap triggers the policy, and the five-year data does not provide relief.
Ms. Kruger joined in 2023 and has now served more than 24 months, so the exemption for newer directors no longer applies; the 24-point three-year peer gap exceeds the trigger threshold, and the five-year check does not clear the bar, so the vote remains AGAINST.
Mr. More has served since 2015 and bears the fullest tenure overlap with the underperformance; the 24-point three-year gap versus company-disclosed peers, combined with a five-year record that also fails the threshold, compels an AGAINST vote under policy.
Ms. Wallace has served since 2019, fully overlapping the period in which HTO underperformed its own compensation peers by 24 percentage points over three years — above the 20-point trigger — and the five-year supplementary check does not provide relief.
For Analysis
Mr. Rowe joined the board in March 2026 and has served fewer than 24 months, making him exempt from the TSR underperformance trigger; he brings nearly four decades of regulated water utility operating experience, which is directly relevant to H2O America's business.
Mr. Walters was appointed to the board in July 2025 and has served fewer than 24 months, so the TSR trigger exemption for newer directors applies; as the current CEO and Chairman, his relevant utility and financial expertise is clearly appropriate for the role, and no other policy flag (overboarding, attendance, independence) is triggered.
Seven of nine directors (Guardino, Hanley, Hunt, Klein, Kruger, More, Wallace) receive AGAINST votes because HTO's stock has declined 15.1% over the past three years while the company's own disclosed compensation peers gained a median of 8.9%, a 24-percentage-point gap that exceeds the 20-point policy threshold applicable when absolute returns are negative; the five-year supplementary check (-17.6pp vs. peers) also fails the threshold, so no votes are upgraded to FOR. Two directors are exempted: Mr. Rowe joined in March 2026 (under 24 months of service) and Mr. Walters was appointed in July 2025 (under 24 months of service), both receiving FOR votes.
Say on Pay
✓ FORCEO
Andrew F. Walters
Total Comp
$2,872,942
Prior Support
94%%
CEO Andrew Walters received total compensation of $2,872,942 in his first full year in the role, which is consistent with a mid-sized regulated utility at H2O America's $2.5 billion market cap level and does not appear to breach the policy's individual or aggregate benchmarking thresholds. The pay program is well-structured: approximately 72% of his target pay is variable and at-risk through a mix of cash incentives tied to financial, operational, and strategic goals, plus performance stock awards tied to return on equity and relative total shareholder return over three years, well above the 50-60% variable pay minimum. The prior year say-on-pay vote received over 94% support, the company has a meaningful clawback policy, and stock award dilution levels appear routine for the sector.
Auditor Ratification
✓ FORAuditor
Deloitte & Touche LLP
Tenure
N/A
Audit Fees
$2,302,400
Non-Audit Fees
$183,790
Non-audit fees of $183,790 represent approximately 8% of audit fees of $2,302,400, well below the 50% threshold that would raise independence concerns; Deloitte is a Big 4 firm fully appropriate for a $2.5 billion company; auditor tenure is not disclosed in the filing so the tenure trigger cannot fire under policy; no material restatements are noted.
Overall Assessment
The 2026 H2O America annual meeting presents three standard proposals; the most significant action is voting AGAINST seven of nine director nominees because the company's stock has lost 15.1% over three years while its own compensation peers gained nearly 9% — a 24-percentage-point gap that triggers the policy's underperformance threshold, and the five-year record provides no relief. The say-on-pay and auditor ratification proposals both pass policy screens cleanly and receive FOR votes.
Compensation Peer Group
12 companies disclosed in 2026 proxy filing