March 20, 2023

Christopher H. Franklin

“Our remarkable 136-year
heritage of dependable
service, consistent innovation
and high performance has
been guided by our core
values of integrity, respect
and excellence. We remain
committed to delivering
high-quality water,
wastewater and natural gas
service to our customers,
helping to solve our nation’s
infrastructure challenges,
protecting our natural
environment, and creating a
culture where everyone feels
empowered to do the same.”

To Our Shareholders

Dear Fellow Shareholders,

On behalf of your Board of Directors, I invite you to attend the 2023 Annual Meeting of the Shareholders of Essential Utilities, Inc. to be held virtually on May 3, 2023.

This past year was foundational for Essential; we reached important milestones that furthered our growth strategy, built on the excellence of our operations, and protected the Earth’s most essential resources. I’m proud of our team and their commitment to our mission. We are guided by our core values of integrity, respect and excellence to deliver critical water, wastewater, and natural gas service to our customers.

An integral part of our commitment is our capital improvement program. In 2022, we invested more than $1 billion in critical infrastructure projects to improve 430 miles of water, wastewater and natural gas pipelines across our service territory. This investment strengthens our systems, improves quality and safety, increases reliability, and enhances compliance for our customers and communities.

We continue to expand our regulated water segment by offering solutions to municipal governments facing the need for significant system improvements. In 2022, we acquired three water and wastewater systems and added approximately $120 million in rate base and over 23,000 new customers or equivalent dwelling units. We also signed two agreements to purchase three water and wastewater systems that collectively are expected to add over 6,700 new customers or equivalent dwelling units for a purchase price of nearly $27 million. With nearly 70,000 water and wastewater systems across the country, we recognize the opportunity for Essential to provide the best solution.

As we continue to focus the growth of our company in states where we have scale, we also announced our plan to sell our West Virginia natural gas assets. The small size of the operation, combined with operational and regulatory challenges, diverted management attention from higher priority strategic initiatives. The strength of our gas segment is an asset to our long-term growth strategy, giving us a solid foundation as we expand our water footprint through acquisition in our gas service territories. We see the value natural gas plays in our growth strategy and the role it will continue to play in America's energy mix long into the future.

We pride ourselves on being innovative leaders, offering solutions to our nation’s infrastructure challenges while ensuring our natural environment is protected. We’ve made incredible progress toward our environmental, social and governance (ESG) goals and look forward to sharing these developments in our updated ESG report, coming later this year. We also continue to accelerate our response regarding treatment of Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS), also known as “forever chemicals,” with dozens of projects in the planning phase or under construction throughout our footprint.

We are a proud community partner, contributing $3.9 million through the Essential Foundation to organizations that enrich the lives of our customers. Just as importantly, our employees demonstrated their support for this key component of our culture, logging more than 3,800 hours of volunteering across the company.

We remain dedicated to the important work of ensuring our corporate culture celebrates diversity, equity and inclusion, and we’re proud of the advancements we’ve made toward these important benchmarks.

I have always been impressed by the commitment of our Essential team and their ongoing dedication to our customers, shareholders and communities, and I look forward to sharing that with you in May. We hope you’ll join us to hear more about our progress and goals for the future.

We are excited about the opportunities for the year ahead—our third as Essential Utilities. Thank you for your continued confidence in Essential and loyalty as a shareholder.

Sincerely,

Christopher H. Franklin

Chairman, Chief Executive Officer and President

Notice of Annual
Meeting of Shareholders

Essential Utilities, Inc.
762 W. Lancaster Avenue

Bryn Mawr, Pennsylvania 19010

Virtual Annual Meeting of Shareholders

Wednesday, May 3, 2023 8:00am ET

Record Date

March 6, 2023

This year’s Annual Meeting will be conducted virtually, entirely by live audio broadcast.

To attend, go to:
www.virtualshareholdermeeting. com/WTRG2023 and log in using the control number on your Notice of Internet Availability, proxy card or voting instruction form.

The list of shareholders will be available for inspection upon request by any shareholder for any purpose germane to the Annual Meeting for a period of 10 days prior to the Annual Meeting at our principal office located at 762 W. Lancaster Avenue, Bryn Mawr, PA 19010, by contacting us at
www.essential.co/investor-relations

Shareholders will have the same opportunities to participate as they would at an in-person meeting, with the opportunity to vote and ask questions on the matters discussed in this proxy statement.

Purpose

1  To elect eight nominees for directors;

2  To approve an advisory vote on the compensation paid to the Company’s named executive officers for 2022;

3  To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Company for the 2023 fiscal year; and

4  To transact any other business as may properly come before the meeting or any adjournments or postponements thereof.

Who can vote

Only shareholders of record at the close of business on March 6, 2023, will be entitled to notice of, and to vote at, the meeting.

Your vote is important

We urge each shareholder to promptly sign and return the enclosed proxy card, or to use telephone or internet voting.

See our Questions and Answers about the Annual Meeting and the voting section of the proxy statement for information about voting by telephone or internet, how to revoke a proxy and how to vote your shares at the virtual annual meeting.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 3, 2023.

The Notice of Annual Meeting, Proxy Statement and 2022 Annual Report to Shareholders are available at: www.proxyvote.com.

If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting login page.

Online before the meeting*

www.proxyvote.com

Online at the meeting

Attend the Annual Meeting virtually at
www.virtualshareholdermeeting.com/WTRG2023
and follow the instructions for voting

By phone*

In the U.S. or Canada
dial toll-free
1-800-690-6903

By mail

Return your signed proxy card
in the postage-paid
envelope provided

By Order of the Board of Directors,

Kimberly A. Joyce

Secretary

March 20, 2023

Proposal 3 Ratification of the Appointment of PricewaterhouseCoopers LLP as

Independent Registered Public Accounting Firm for Fiscal 2023

88

A-1

Proposal

Description

Proposal 1

Election of Directors

Proposal 2

Advisory Vote to Approve Named Executive Officers’ Compensation

Proposal 3

Ratification of Independent Accounting Firm

The Board believes that retaining PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the 2023 fiscal year is in the best interests of the Company and our shareholders. As a matter of good corporate governance, shareholders are being asked to ratify the Audit Committee’s selection of PricewaterhouseCoopers LLP.

Director Nominee

Age

Director Since

Principal Occupation

Other Public Company Boards

Executive

Executive Compensation

Audit

Risk Mitigation & Investment Policy*

Corporate Governance

0

●

●

CHAIR

1

●

●

Christopher H. Franklin

Chairman

Chairman, President and Chief
Executive Officer,

Essential Utilities, Inc.

1

CHAIR

●

Daniel J. Hilferty

Lead Independent Director

0

●

CHAIR

0

●

●

0

●

●

0

●

●

•  Annual election of directors

•  15-year term limit for directors who were elected after 2015

•  Peer review of director performance

•  Eight out of nine directors* were independent

•  Independent audit, compensation, and governance committees

•  Five of our nine directors* were women or members of underrepresented minorities

•  Women make up 33% of the Board

•  All of the directors but one joined the Board since 2015

•  Mandatory retirement age of 75 for directors (Directors Ruff and Stewart are currently 74 years old)

•  Risk oversight by full Board and all committees

•  Robust oversight of cybersecurity measures by full Board and Risk Mitigation & Investment Policy Committee

•  Board oversight of ESG program

•  Conducted independent auditor RFP

•  Robust director and management stock ownership guidelines

•  Directors: 5x annual base cash retainer

•  CEO: 5x midpoint of average base salary

•  Other NEOs/EVPs: 3x midpoint of average base salary

·  In 2022, we invested a record amount of over $1.06 billion in infrastructure projects across the water and gas utilities, helping to ensure safe and reliable service for all customers.

·  Net income was $465.2 million in 2022, an increase of 7.8 percent over 2021.

·  Earnings per share were $1.77 in 2022 compared to $1.67 in 2021, an increase of 6.0%.

·  We added over 23,000 water and wastewater customer equivalents through acquisitions in 2022 and increased water and wastewater customers served by 2.7 percent, which includes customers from organic growth and acquisitions. Our acquisitions in 2022 added approximately $120 million in rate base.

·  We signed purchase agreements to acquire three water and wastewater systems in 2022. These systems are expected to add over 6,700 equivalent retail customers or equivalent dwelling units.

·  From January 1, 2018, to December 31, 2022, the total return to our shareholders, including share price appreciation and dividends paid, grew by 36.4 percent.

·  In August 2022, the Board of Directors approved a 7 percent increase in the quarterly dividend, to an annualized rate of $1.1480 per share.

·  Since making a commitment to reduce greenhouse gas emissions in early 2021, the Company has achieved an estimated 23% Scope 1 and 2 emissions reduction from our 2019 baseline towards our 60% reduction target by 2035.

·  As of year-end 2022, people of color represented 16% of our employee base, nearing our multi-year target of 17%.

·  In controllable spending, we purchased over 15% of goods and services from diverse suppliers, achieving our multi-year target of 15%.

•   Shareholder outreach designed to align compensation practices with shareholder interests

•   Compensation program highly correlated to total shareholder return, adjusted earnings per share, and other financial metrics

•   Continued emphasis on performance-based compensation

•   Significant portion of compensation is variable and at risk

•   Reasonable and limited number of change-in-control agreements with double-trigger termination clauses

•   All incentive compensation is subject to our newly adopted clawback policy

•   Anti-hedging and anti-pledging policy in effect

•   No tax gross-ups

•   Share ownership requirements ensure that executives are aligned with shareholders

•   Reasonable severance arrangements in line with market practices

•   Modest perquisites

•   Compensation program aimed at encouraging management to support diversity, equity, and inclusion in the organization

•   Review peer group data, as available, and compensation survey data in establishing executive compensation

EPS

(adjusted for comp plan)*

STI Payout %

3 Year TSR Return

PSU Payout %

At our 2022 annual meeting of shareholders, our shareholders strongly supported our compensation program, with 97.1% of shareholders voting in agreement with the Company’s compensation design. We believe the high level of support recognized the thoughtfulness and consideration the Executive Compensation Committee and the management team showed in ensuring the program aligns with shareholder interests.

Over the course of 2022, management held over 250 meetings with investors. Additionally, as part of our governance-focused outreach, we offered to meet with our top 25 shareholders. For this effort, we engaged with every shareholder who accepted our offer to meet. During these meetings and calls, we discussed numerous topics, including Company strategy, executive compensation, and environmental, social and governance performance.

For more information on our shareholder engagement program, investor feedback and the actions taken in response to that feedback, please see page 28 in this proxy statement.

Utility Industry

●

●

●

●

Regulatory

●

●

●

●

Financial

●

●

●

●

●

●

●

Legal/Government

●

●

●

Leadership

●

●

●

●

●

●

●

●

Mergers & Acquisitions

●

●

●

●

●

●

●

Geographic Diversity

●

●

●

●

●

●

“C-Suite” Experience

●

●

●

●

●

●

●

Climate Experience

●

Board Committees

·  Chair, Corporate
Governance Committee

·  Executive Compensation
Committee

·  Executive Committee

Key Skills

  Legal/Government

   Leadership

  Mergers & Acquisitions

  Geographic Diversity

  “C-Suite” Experience

Elizabeth B. Amato

Former Executive Vice President and
Chief Human Resources Officer, United Technologies Corp.

Director since 2018

Age 66

Independent Director

Experience

·  Executive Vice President & Chief Human Resources Officer of United Technologies Corp. (UTC), 2015-2020.

·  Senior Vice President, Human Resources and Organization of UTC with global responsibility for Human Resources and Communications functions 2012-2015.

·  Ms. Amato joined UTC in 1985 at Pratt & Whitney, and held a variety of the most senior human resources leadership positions across the corporation in both aerospace and commercial building systems, including UTC Climate, Controls & Security (2011-2012), Carrier (2010-2011), Pratt & Whitney (2006-2009) and Sikorsky (1997-2006).

Ms. Amato is a recipient of the YWCA Women Achievers Award. She is currently a member of the Board of Directors for Children’s Healthcare Charity, Inc. and Wake Forest University College Board of Visitors. Ms. Amato holds a bachelor’s degree in political science from Davidson College and a law degree from the University of Connecticut.

Qualifications

Ms. Amato has over 30 years of experience in various roles with responsibilities ranging from integrating acquisitions to human resources to executive compensation. The Board of Directors believes Ms. Amato’s independence, her broad experience, and her leadership roles support the Board’s conclusion that Ms. Amato should serve as a director of the Company.

Other current public company directorships

None

Board Committees

·  Audit Committee

·  Corporate Governance
Committee

Key Skills

  Financial

   Leadership

  Mergers & Acquisition

  Geographic Diversity

  “C-Suite” Experience

David A. Ciesinski

President, Chief Executive Officer and Director of Lancaster Colony Corporation and President of its subsidiary, T. Marzetti Company

Director since 2021

Age 56

Independent Director

Experience

·  CEO of Lancaster Colony Corporation, a Nasdaq- listed company that produces and markets consumer products with a focus on specialty food products for the retail and foodservice markets, since 2017.

·  President of Kraft Meal Solutions, 2014-2016.

·  Group Vice President and Chief Marketing Officer, H.J. Heinz Company, U.S. Retail Division, 2001-2013.

Mr. Ciesinski is a graduate of West Point and a veteran of the U.S. Army, with service during the first Gulf War in Iraq, where he earned a Bronze Star Medal. Mr. Ciesinski holds a master’s degree in marketing and finance from the Tepper School of Business at Carnegie Mellon University.

Qualifications

Mr. Ciesinski has over 20 years of experience in various roles with responsibilities ranging from manufacturing to finance to mergers and acquisitions. The Board of Directors believes Mr. Ciesinski’s independence, his broad experience, and his leadership roles support the Board’s conclusion that Mr. Ciesinski should serve as a director of the Company.

Other current public company directorships

Lancaster Colony Corporation (since 2016)

Board Committees

·  Chair, Executive Committee

·  Risk Mitigation and
Investment Policy
Committee

Key Skills

   Utility Industry

  Regulatory

  Financial

  Legal/Government

   Leadership

  Mergers & Acquisition

   C-Suite Experience

Christopher H. Franklin

Chairman, President, and Chief Executive Officer, Essential Utilities, Inc.

Director since 2015

Age 57

Experience

Chairman, President, and Chief Executive Officer of the Company.

Mr. Franklin is active in the community and serves on a number of nonprofit and higher education boards, including the University of Pennsylvania Board of Trustees and the Franklin Institute of Philadelphia. He earned his B.S. from West Chester University and his M.B.A. from Villanova University.

Qualifications

Since 2015, under Mr. Franklin’s leadership as CEO, the Company’s customer base has nearly doubled by completing over 65 acquisitions and increased its market capitalization from $4.4 billion to $12.5 billion at the end of 2022. During the same period, total shareholder return has been in excess of 128%.

During his long tenure at the Company, Mr. Franklin has held a series of roles. Among his accomplishments in public affairs was pivotal advocacy for the passage of key legislation designed to provide customers with improved water quality and better water and wastewater systems while allowing a fair and reasonable return for shareholders. As vice president of customer operations, Mr. Franklin lead the implementation of a single-customer information system and the creation of three central call centers. As operating president, he integrated the acquisition of AquaSource and brought the utility back to full profitability.

The Board of Directors believes Mr. Franklin’s extensive experience with the Company, capabilities, and his demonstrated leadership roles with the Company and in business and community activities support the Board’s conclusion that Mr. Franklin should serve as a director of the Company.

Other current public company directorships

Centerpoint Energy Company (2022-present)

Board Committees

·  Chair, Executive
Compensation Committee

·  Executive Committee

Key Skills

  Regulatory

  Financial

   Leadership

  Mergers & Acquisitions

  C-Suite Experience

Daniel J. Hilferty

Lead Independent Director, Essential Utilities, Inc.

Chief Executive Officer, Comcast Spectacor
Chairman and Chief Executive Officer, Dune View Strategies

Director since 2017

Age 66

Independent Director

Experience

·  Chief Executive Officer, Comcast Spectacor, a Philadelphia-based American sports and entertainment company, since February 2023.

·  Chairman and CEO, Dune View Strategies, an advisory firm focused on healthcare, since 2021.

·  Former President and Chief Executive Officer of, and former Executive Advisor to, Independence Health Group (IHG), one of the nation’s leading health insurers serving nine million customers in 25 states and Washington D.C. (2010-2022).

·  President and Chief Executive Officer of the AmeriHealth Mercy Family of Companies (1996-2009).

·  Executive Director of PennPORTS in the administration of Pennsylvania Governor Robert P. Casey (1990-1991).

·  Assistant Vice President overseeing community and media relations for Saint Joseph’s University (1987-1990).

Qualifications

Mr. Hilferty has extensive knowledge and experience in the areas of mergers and acquisitions, the health care field, and government relations and regulation. Based on Mr. Hilferty’s experience, qualifications, and knowledge, in 2017, the Board of Directors determined that Mr. Hilferty should serve as its Lead Independent Director. The Board of Directors believes Mr. Hilferty’s independence, his experience with regulation, his reputation in the healthcare industry, and his leadership roles in business and community activities support the Board’s conclusion that Mr. Hilferty should serve as a director of the Company.

Other affiliations

Mr. Hilferty has served on several industry-based and nonprofit boards, including America’s Health Insurance Plans, Greater Philadelphia Chamber of Commerce, and on a fund board of FS Investments. In 2015, he served as co-chair on the Executive Leadership Cabinet of the World Meeting of Families. In 2015, he served as Chairman of the Board of Directors for the Blue Cross and Blue Shield Association.

Other current public company directorships

None

Board Nominee

·  Audit Committee

·  Risk Mitigation and
Investment Policy
Committee

Key Skills

   Utility Industry

  Financial

  Leadership

  Mergers & Acquisitions

  Geographic Diversity

  C-Suite Experience

  Climate Experience

Edwina Kelly

Managing Director, Canada Pension Plan Investment Board, Sustainable Energies Group

Director since 2021

Age 36

Independent Director

Experience

·  Managing Director in the Sustainable Energies Group at Canada Pension Plan Investment Board (CPPIB) since 2019; responsible for originating new investments, transaction management, and asset management for investments in the CPPIB’s global Power & Renewables group.

·  Director at EFG Hermes UAE, where she helped manage the renewable energy platform, and led solar portfolio acquisitions and equity restructuring of wind farm investments (2015-2018).

·  Board member of Cordelio Power, an independent power producer that develops, owns and manages renewable power facilities across North America.

·  Board member of Redaptive, Inc., a leading energy-as-a-service provider that funds and installs energy-saving and energy- generating equipment.

Ms. Kelly has a bachelor’s degree in philosophy, politics and economics from the University of Oxford and is an associated chartered accountant member of the Institute of Chartered Accountants in England and Wales.

Ms. Kelly is nominated to the Board as designated by CPPIB under the terms of the Company’s private placement transaction with CPPIB.

Qualifications

The Board has determined, based on her abilities, qualifications, knowledge, judgment, character, leadership skills, education, background and experience in fields and disciplines relevant to the Company, including her financial expertise, that Ms. Kelly is qualified to serve on and will make a positive contribution to the Board. The Board of Directors believes Ms. Kelly’s extensive experience with US renewable energy, mergers and acquisitions, her auditing and evaluation of financial statements and complex accounting issues, her capabilities, and her demonstrated leadership roles support the Board’s conclusion that Ms. Kelly should serve as a director of the Company.

Other current and past directorships

Canterra GP Ltd., a Canadian farmland portfolio.

VTRM Energia, a joint venture between CPPIB and Votorantim investing in renewable energy in Brazil.

Cordelio Power, an independent power producer.

Redaptive, Inc., an energy-as-a-service provider.

Other current public company directorships

None

Board Committees

·  Audit Committee

·  Risk Mitigation and
Investment Policy Committee

Key Skills

  Financial

   Leadership

  Geographic Diversity

W. Bryan Lewis

Vice President and Chief Investment Officer for United States Steel Corporation

Director since 2022

Age 46

Independent Director

Experience

·  Vice President and Chief Investment Officer for United States Steel Corporation since 2019; responsible for the company’s global investments for both the defined contribution and defined benefit plans, as well as other related programs.

·  President and Chair, United States Steel Corporation and Carnegie Pension Fund, since 2019.

·  Chief Investment Officer for Pennsylvania State Employees’ Retirement System of Pennsylvania managing a $30 billion pension fund ( 2016-2019).

·  Executive Director for State Universities Retirement System of Illinois managing a$ 20 billion pension fund (2015-2016).

·  Investment Management for North Carolina Department of State Treasurer – Retirement Systems Division (2009-2015).

Mr. Lewis holds an MBA from the University of Miami and a bachelor of science degree in economics from the University of Maryland College Park.

Qualifications

The Board has determined, based on his abilities, qualifications, knowledge, judgment, character, leadership skills, education, background and experience in fields and disciplines relevant to the Company, including his financial expertise, that Mr. Lewis is qualified to serve on and will make a positive contribution to the Board. The Board of Directors believes Mr. Lewis’ extensive experience with financial services, auditing and evaluation of financial statements and complex accounting issues, his capabilities, and his demonstrated leadership roles support the Board’s conclusion that Mr. Lewis should serve as a director of the Company.

Other affiliations

Mr. Lewis serves on several industry-based and nonprofit boards, including Steelworkers Pension Trust (member on Board of Trustees), Virginia Retirement System (advisory member to the Board), Financial Accounting Foundation (Director), Propel Schools (Director), John Rex Endowment (Director), University of North Carolina Health Foundation (Director), Toiga Foundation (Director), and Institute for Private Capital (Director).

Other current public company directorships

None

Board Committees

·  Corporate Governance Committee

·  Executive Compensation Committee

Key Skills

  Utility Industry

  Regulatory

  Financial

  Legal/Government

   Leadership

  Mergers & Acquisitions

  Geographic Diversity

  C-Suite Experience

Ellen T. Ruff

Former President, Office of Nuclear Development, Duke Energy Corporation

Director since 2006

Age 74

Independent Director

Experience

·  President, Office of Nuclear Development, for Duke Energy Corporation, from 2008 until her retirement in January 2011.

·  Partner at the law firm of McGuire Woods LLP (2011-2018).

·  President of Duke Energy Carolinas, an electric utility that provides electricity and other services to customers in North Carolina and South Carolina (2006-2008).

Ms. Ruff joined Duke Energy in 1978 and during her career held a number of key positions, including:
Vice President and General Counsel of Corporate, Gas and Electric Operations; Senior Vice President and General Counsel for Duke Energy; Senior Vice President of Asset Management for Duke Power; Senior Vice President of Power Policy and Planning; and Group Vice President of Planning and External Affairs.

Qualifications

Ms. Ruff has over 30 years of experience with a major utility company in various management, operations, legal planning and public affairs positions. Ms. Ruff has lived and worked in North Carolina, an important area of the Company’s operations, for many years.

The Board of Directors believes Ms. Ruff’s independence, her experience with various aspects of the utility industry, her knowledge of North Carolina, and her significant leadership roles in business and community activities support the Board’s conclusion that Ms. Ruff should serve as a director of the Company.

Other current public company directorships

None

Board Committees

·  Chair, Audit Committee

·  Executive Committee

·  Executive Compensation Committee

Key Skills

   Utility Industry

  Regulatory

  Financial

   Leadership

  Mergers & Acquisitions

  Geographic Diversity

  C-Suite Experience

Lee C. Stewart

Private Financial Consultant

Director since 2018

Age 74

Independent Director

Experience

·  Mr. Stewart is a private financial consultant with over 25 years of experience as an investment banker.

·  Vice President at Union Carbide Corporation from 1996 to 2001, responsible for various treasury and finance functions.

Qualifications

Mr. Stewart has over 25 years of experience as an investment banker and as a director of a public company. Mr. Stewart has significant experience with financial services, finance and banking, public company accounting and financial reporting, strategic planning, operations and risk management, and corporate governance. The Board of Directors believes Mr. Stewart’s independence and his experience supports the Board’s conclusion that Mr. Stewart should serve as a director of the Company.

Other current public company directorships

P. H. Glatfelter Company, a New York Stock Exchange-listed global supplier of specialty papers and engineered materials (since 2002).

Board Committees

·  Chair, Risk Mitigation and Investment Policy Committee

·  Corporate Governance Committee

Key Skills

   Utility Industry

  Regulatory

  Legal/Government

  Mergers & Acquisitions

   Leadership

  Geographic Diversity

  C-Suite Experience

Christopher C. Womack

President and Chief Executive Officer, Southern Company (appointed in March 2023)

Director since 2019

Age 65

Independent Director

Experience

·  President and Chief Executive Officer of Southern Company, a leading American gas and electric utility holding company based in Atlanta, Georgia, since March 2023.

·  Chairman, President and Chief Executive Officer, Georgia Power, a subsidiary of Southern Company, 2020 to March 2023.

·  Mr. Womack worked in various executive leadership positions at Southern Company since

1988, including President of External Affairs and Executive Vice President, Georgia Power Company (2006-2008); Senior Vice President, Fossil & Hydro Power, Georgia Power Company (2001-2006); and Senior Vice President, Human Resources (1998-2001).

·  Legislative aide in the U.S. House of Representatives (1979-1987).

Qualifications

Mr. Womack has over 20 years of experience as an executive of a gas and electric utility. He has significant experience with utility operations, human resources and governmental affairs.

Other current public company directorships

Invesco Ltd., a New York Stock Exchange-listed global independent investment management firm (since 2021).

Christopher H. Franklin
Chairman of the Board and
Chief Executive Officer

Daniel J. Hilferty

Lead Independent Director                

Lead Independent Director

The Board of Directors annually elects the lead independent director to execute the following clear and specific duties:

·  Preside at all meetings of the Board at which the Chairman of the Board is not present, including executive sessions of the independent directors;

·  Serve as liaison between the independent directors and the Chairman of the Board;

·  Consult with the Chairman of the Board, reviewing and approving meeting agendas and information provided to the Board for meetings, with the authority to add items to the agendas for any Board meeting;

·  Review and approve meeting schedules to ensure there is sufficient time for discussion of all agenda items;

·  Call executive sessions of the independent directors and prepare the agendas for the executive sessions;

·  If requested by major shareholders, participate in consultation and direct communications;

·  Serve as a member of the Executive Committee; and

·  In the event of the death or incapacity of the Chairman, become the acting Chairman of the Board until a new Chairman is selected.

The Lead Independent Director routinely meets in executive session with the other independent directors and without Mr. Franklin present.

The Lead Independent Director has the authority (with the approval of at least the majority of the directors) to engage legal, financial or other advisors as the independent directors deem appropriate at the Company’s expense and without consultation or the need to obtain approval from any officer of the Company.

Fiscal Year

Fees Paid to IHG

IHG Gross Revenues

Chair

Lee C. Stewart

Members

David A. Ciesinski

Edwina Kelly

W. Bryan Lewis

All members are independent under NYSE listing requirements and SEC rules.

All members are financially literate as defined in the NYSE listing standards and are audit committee financial experts within the meaning of applicable SEC rules.

Audit

2022 Meetings Held 9

The Committee’s primary responsibilities are to:

·  monitor the integrity of the Company’s financial reporting process and systems of internal controls, including the review of the Company’s annual audited financial statements; and

·  monitor the independence of our independent registered public accounting firm.

The Committee has the exclusive authority to select, evaluate and, where appropriate, replace the Company’s independent registered public accounting firm.

In 2023, the Committee ran a process requesting proposals for bids to determine if the Company’s independent registered public accounting firm is the appropriate auditor and to determine if the firm charges the appropriate fee structure. The Committee also has considered the extent and scope of non-audit services provided to the Company by its independent registered public accounting firm and has determined that these services are compatible with maintaining that firm’s independence.

Chair

Daniel J. Hilferty

Members

Elizabeth B. Amato

Ellen T. Ruff

Lee C. Stewart

All members are independent under NYSE listing standards

Executive Compensation

2022 Meetings Held 5

The Committee is responsible for administering our equity compensation plans and determining executive compensation each year.

As part of its annual compensation-setting process, the Committee:

·  reviews the recommendations of the Chief Executive Officer as to appropriate compensation of the Company’s executive officers (other than the Chief Executive Officer) and determines the compensation of these executive officers; and

·  reviews and recommends to the Board of Directors the compensation for the Chief Executive Officer, which is subject to final approval by the independent members of the Board of Directors.

The Committee has retained an independent compensation consultant, Pay Governance LLC, to assist in designing our executive compensation program and assessing its competitiveness through benchmarking peer analysis and other methodologies.

The Committee has the power to delegate aspects of its work to subcommittees, with the approval of the Board of Directors.

Chair

Elizabeth B. Amato

Members

David A. Ciesinski

Ellen T. Ruff

Christopher C. Womack

All members are independent under NYSE listing standards

Corporate Governance

2022 Meetings Held 5

The Committee’s primary responsibilities include:

·   identifying and considering qualified nominees for directors;

·   developing and periodically reviewing the Corporate Governance Guidelines;

·   advising the Board of Directors on director nominees, executive selections and succession planning, including a succession plan for the CEO and other senior executives; and

·   implementing and overseeing the comprehensive Board, Committee and peer review process.

The Committee reviews and approves, ratifies or rejects related person transactions under the Company’s written policy.

The Committee also has direct oversight over most ESG matters and provides guidance on ESG decisions. To that end, at each Committee meeting, updates on ESG projects, trends and developments are presented. Additionally, each meeting features presentations on a key area of ESG, allowing for the Committee to study each area in-depth over the course of a year.

Chair*

Christopher C. Womack

Members

Edwina Kelly

Christopher H. Franklin

*Mr. Womack is not seeking reelection. The Board will appoint a new Committee Chair after the Annual Meeting.

Risk Mitigation and
Investment Policy

2022 Meetings Held 5

The Committee’s primary responsibilities include:

·  Overseeing the Company’s risk management process, policies, and procedures for identifying, managing and monitoring critical risks, including cyber-related risks, and compliance with legal and regulatory requirements; and

·  Overseeing the Company’s acquisition process, including being briefed on all potential transactions in excess of $10 million, and reviewing all acquisitions valued in excess of$ 20 million and all transactions that involve the Company’s stock.

The Committee’s Chairperson communicates with other Board Committees to avoid overlap and potential gaps in overseeing the Company’s risks. The Committee advises the Board of Directors in its performance of its oversight of enterprise risk management.

Chair

Christopher H. Franklin

Members

Elizabeth B. Amato 

Daniel J. Hilferty

Lee C. Stewart

Executive Committee

2022 Meetings Held 0

The Committee has and exercises all the authority of the Board in the management of the business and affairs of the Company, with certain specified exceptions.

·  The Committee is intended to serve in the event that action by the Board of Directors is necessary or desirable between regular meetings of the Board and when convening a meeting of the entire Board is not practical, or to make recommendations to the entire Board with respect to various matters.

·  The Chairman of the Board of Directors serves as Chairman of the Committee.

Spotlight on Data Security and Privacy

Essential has a robust and long-standing cybersecurity program, which is aligned to the National Institute of Standards and Technology (NIST) Cybersecurity Framework.

Management Committee: The information security and cybersecurity program is overseen by a cross-functional committee of senior business leaders. This Committee meets bimonthly and is charged with ensuring that cyber risk is managed and that the program is aligned to business goals and objectives. Updates are provided to the Risk Mitigation and Investment Policy Committee quarterly and to the full Board once a year.

Risk Management: The information security organization is responsible for ongoing vulnerability assessments and threat analysis to essential assets such as customer and employee data, critical business systems, and industrial control environments.

Controls, Policy & Compliance: Essential has implemented enterprise-wide security policies, standards and controls that incorporate best practices in security engineering, technology architecture and data protection, which support regulatory compliance. An annual review of Essential’s security framework controls is conducted in conjunction with a third party to promote objectivity.

Awareness, Training & Assessment: We have implemented specialized programs, such as enterprise-wide communications, presentations, phishing simulations and focused training for specific roles, as well as a general cybersecurity training program required for all employees.

Board of Directors

The full Board receives written reports and updates from Company executives at all regularly scheduled meetings on ESG matters including safety, sustainability, environmental stewardship, diversity and human capital management.

The Corporate Governance Committee has direct oversight of most ESG matters. At each Committee meeting, updates on ESG initiatives, trends and developments are presented and discussed. Additionally, each meeting features presentations on a key area of ESG, allowing for the Committee to study each area in-depth over the course of a year.

Management

CEO and Executive Management Team

Management is responsible for designing, implementing, and executing our comprehensive ESG program as well as reporting to stakeholders on our ESG performance and progress. Half of the weighting in the executives’ short-term incentive compensation program focuses on these important ESG issues.

The ESG Oversight Committee meets at least quarterly to discuss ESG matters, strategy, and technical planning to achieve various goals. This committee is made up of nearly a dozen senior leaders from different functional areas and backgrounds who offer diverse perspectives. Essential’s CEO is also involved in the issues discussed and initiatives planned.

·  make efforts to avoid causing or contributing to human rights violations;

·  mitigate and/or remediate adverse human rights impacts of our operations where possible;

·  prohibit the use of child labor, forced labor, or human trafficking; and

·  be transparent in our efforts, successes and challenges.

·   merger and acquisition strategy;

·   regulatory matters;

·   utility accounting and financing;

·   water, wastewater, and natural gas operations;

·   ESG;

·   board governance functions;

·   Pennsylvania law with respect to the directors’ fiduciary duties; and

Actions Taken

Focus on performance

Following 2021 shareholder outreach, we continued our focus on creating performance-driven compensation opportunities for our named executive officers. 79% of our CEO’s compensation is performance-based and/or stock-based.

In 2021, we added a new supplier and employee diversity metric (10% weighting). Our diversity goals incentivize and encourage management to continue to build a diverse and inclusive workplace.

The Company’s commitment to ensuring diversity and inclusion in the workplace continues to evolve with the continuation of diversity metrics in the Company’s short-term incentive plan in 2023.

Ratification of Shareholder Disclosure of Holdings

In early 2022, the Board of Directors voted to amend the Company’s Amended and Restated Bylaws, as amended (the Bylaws), to require derivative securities holdings disclosure when a shareholder uses the procedures in the Bylaws to nominate a candidate for election as a director or presents a proposal for consideration by shareholders at an annual meeting of shareholders. This change was ratified by shareholders for ratification at the 2022 Annual Meeting.

ESG Disclosure

Based upon our review and shareholder feedback, we remain committed to expanding the disclosures of our environmental and social policies in a renewed ESG report, and providing easier access to locate these policies. Our ESG report can be found at: www.ESG.Essential.co and other relevant policies can be found at www. Essential.co/investor-relations. In 2022, we provided updates on the progress on our ESG commitments and in 2023 we expect to publish a new ESG report.

Board of Directors

The Full Board receives written reports and formal updates from Company executives at regularly scheduled meetings on ESG matters including safety, environmental stewardship, DEI (diversity, equity, and inclusion), and human capital management. The Corporate Governance Committee has direct oversight of most ESG matters. At each committee meeting, management present updates about progress towards goals and targets.

Management Committee

Management’s ESG Oversight Committee is made up of senior leaders from different functional areas and backgrounds. They meet at least quarterly to discuss ESG matters, strategy, and technical planning to achieve goals, with input from our CEO.

·  Sustainability and Environmental Policy

·  Human Rights Policy

·  Human Rights to Water Policy

·  Political Spending Policy

·  Code of Ethical Business Conduct

·  Conflict of Interest Policy

·  Equal Employment Opportunity and Anti-Harassment Policy

·  Positions on Unions

·  Corporate Governance Guidelines

Board Oversight and Climate Risk Management

•   We have significant Board-level oversight of climate-related issues, including the risk factors associated with climate change. The Governance Committee’s October 2022 meeting featured an in-depth and full review of these matters.

•   Essential’s ESG Oversight Committee, a group of senior leaders from across the organization as well as the CEO, meet at least once each quarter to discuss these topics.

Investing in Our Nation’s Infrastructure

Essential is committed to renewing and improving water and wastewater infrastructure through thoughtful and continuous capital investment. We have invested over $3.5 billion in infrastructure improvements and replaced more than 1,300 miles of aging water main since 2012. We are also making critical and robust investments in gas infrastructure. In 2013, Peoples Gas launched its Long-Term Infrastructure Improvement Plan (LTIIP), an aggressive 20-year effort to replace and upgrade more than 3,000 miles of distribution main with modern resilient materials.

Board Oversight of Human Capital Management

Essential’s Board of Directors recognizes that our ability to attract, retain, and develop exceptional talent is a key strategic driver of long-term growth and success for all our stakeholders. The Chief Human Resources Officer regularly presents updates to the full Board as well as to the Governance Committee, engaging in strategic discussion with the group regarding the topics outlined below.

In 2021, we announced a multi-year plan to increase employee diversity to 17% and added an employee diversity metric (5% weighting) to our short-term executive compensation incentive plan. The percentage of employees of color at Essential rose from 15% at the end of 2021 to 16% at the end of 2022.

Board Diversity as of December 31, 2022

More than 55% of the board is diverse. Three of our nine board members are female and two of our male board members are people of color.

Employee Diversity

•   Diversity hiring for the organization grew by more than 16%.

•   Diversity at the management level also grew, with 11% of management comprised of minorities and 22% comprised of women by the end of 2022.

*   Please refer to ESG.Essential.co for more detailed workforce composition data in line with EEO-1 standards. of 2022.

•   We are committed to diverse candidate searches for leadership roles within the organization

•   We built a DE&I dashboard to provide diversity data to leadership to track progress towards building and promoting a diverse workforce

•   We regularly review our customer demographics to develop meaningful and reflective employee diversity goals to make our workforce more representative of the communities we serve.

•   We hold educational workshops and action planning sessions for employees across our Company to improve the dialogue and build on an inclusive culture.

•   Leadership convenes monthly meetings on diversity efforts in specific areas as well as trends and action items

Our diversity recruitment is supported through:

•   Diversity associations and job boards for employees of color, veterans and women

•   Recruitment of new talent from local community colleges and city-based universities

•   Partnerships with technical and training facilities that focus on a diverse student population

•   make efforts to avoid causing or contributing to human rights violations;

•   mitigate and/or remediate adverse human rights impacts of our operations where possible;

•  prohibit the use of child labor, forced labor, or human trafficking; and

•  be transparent in our efforts, successes and challenges.

Stock grant equal to
$110,000 in value

Stock grant equal to
$120,000 in value

Certain Beneficial Owners

BlackRock, Inc.⁽³⁾

55 East 52nd Street New York, NY 10055

The Vanguard Group⁽⁴⁾

100 Vanguard Blvd. Malvern, PA 19355

State Street Corporation⁽⁶⁾

One Lincoln Street Boston, MA 02111

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