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PRELIMINARY PROXY—SUBJECT TO COMPLETION

California Water Service Group

California Water Service Company, Hawaii Water Service Company,
New Mexico Water Service Company, Washington Water Service Company,
TWSC, Inc., CWS Utility Services, and HWS Utility Services

1720 North First Street
San Jose, CA 95112-4508
(408) 367-8200

April , 2022

Dear Fellow Stockholder:

It is my pleasure to invite you to join us for the California Water Service Group 2022 Annual Meeting of Stockholders at 9:30 a.m. Pacific Time on Wednesday, May 25, 2022. Once again, we will hold the Annual Meeting online to allow for greater participation by all of our stockholders, regardless of their geographic location. Reduce the costs and environmental impact of the Annual Meeting and continue to support the health and well-being of our employees and stockholders during the pandemic. Please see the Notice of Annual Meeting on the next page for more information. Your vote is very important. We encourage you to read the Proxy Statement and vote your shares at your earliest convenience, even if you plan to attend the meeting.

2021 was another year of successfully navigating the global pandemic and the challenges it brought to our everyday lives. Through it all, we remained focused on fulfilling our essential role of providing our customers and communities continued access to a safe, reliable, and affordable water supply. We continued to take extraordinary measures to keep our employees healthy and to support our customers and the communities we serve during this difficult year. We also made tremendous effort to make critical improvements to our infrastructure so that our water systems remain safe and reliable, both now and in the future.

Notwithstanding these challenges, in fiscal 2021 we delivered excellent business results to our stockholders. For the year, we had strong financial performance. We invested $293 million in infrastructure, expanded into a fifth state, Texas, and added 4,600 new customers. We also focused on making environmental, social, and governance progress as part of our overall risk management program, which is critical to the long-term sustainability of our business.

This year’s Board nominees represent a wide range of backgrounds and expertise. We believe our diversity of experiences, perspectives, and skills contributes to the Board’s effectiveness in managing risk and overseeing strategy and execution, positioning us for long-term success.

On behalf of the California Water Service Group Board of Directors, thank you for your continued support and investment.

Sincerely,

Peter C. Nelson
Chairman of the Board

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California Water Service Group

Notice of Annual Meeting of Stockholders

	Date and Time				Location				Record Date
	Wednesday, May 25, 2022 9:30 a.m. Pacific Time				To attend and participate in the Annual Meeting visit www.virtualshareholdermeeting.com/CWT2022				Only stockholders at the close of business on March 29, 2022 are entitled to receive notice of and vote at the Annual Meeting

The 2022 Annual Meeting of Stockholders of California Water Service Group (Group) will be held on May 25, 2022, at 9:30 a.m. Pacific Time. You will be able to attend the Annual Meeting, vote your shares electronically, and submit your questions during the live webcast by visiting www.virtualshareholdermeeting.com/CWT2022. At the Annual Meeting, stockholders will consider and vote on the following matters:

Election of the 12 directors named in the Proxy Statement;

An advisory vote to approve executive compensation;

Ratification of the selection of Deloitte & Touche LLP as the Group’s independent registered public accounting firm for 2022;

Approval of an amendment to the Certificate of Incorporation to increase the number of authorized shares of common stock from 68,000,000 to 136,000,000; and

Such other business as may properly come before the Annual Meeting.

These matters are more fully described in the proxy statement accompanying this notice. We believe your vote is important. Please submit a proxy as soon as possible so that your shares can be voted at the Annual Meeting in accordance with your instructions. You may submit your proxy: (a) online, (b) by telephone, or (c) by U.S. Postal Service mail. You may revoke your proxy at any time prior to the vote at the Annual Meeting. Of course, in lieu of submitting a proxy, you may vote online during the Annual Meeting. For specific instructions, please refer to “Questions and Answers About the Proxy Materials and the Annual Meeting” in this proxy statement and the instructions on the proxy card.

In the event of a technical malfunction or other situation that the Chair determines may affect the ability of the Annual Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Annual Meeting, the Chair or Corporate Secretary will convene the meeting at 10:30 a.m. Pacific Time on the date specified above and at the address specified above solely for the purpose of adjourning the meeting to reconvene at a date, time, and physical or virtual location announced by the Chair or Corporate Secretary. Under either of the foregoing circumstances, we will post information regarding the announcement on our Investor Relations website at http://ir.calwatergroup.com.

Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be Held on May 25, 2022: Electronic copies of the Group’s Form 10-K, including exhibits, and this Proxy Statement will be available at www.proxyvote.com.

The Group expects to mail the Notice Regarding Internet Availability of Proxy Materials to its stockholders commencing on or about April , 2022.

By Order of the Board of Directors

Michelle R. Mortensen
Vice President, Corporate Secretary and Chief of Staff

April , 2022

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PROXY SUMMARY

Information About Our 2022 Annual Meeting of Stockholders

Date and time:

Wednesday, May 25, 2022 at 9:30 a.m. Pacific Time

Location:

To attend and participate in the Annual Meeting visit www.virtualshareholdermeeting.com/CWT2022

Record Date:

March 29, 2022

Voting matters:

Stockholders will be asked to vote on the following matters at the Annual Meeting:

Overview of Voting Items

Proposal	For More Information	Board Recommendation
Proposal 1: Election of 12 Directors	Pages 12-27	FOR All Nominees
The Board of Directors and Nominating/Corporate Governance Committee believes that all of the following 12 nominees listed are highly qualified and have the skills and experience required for membership on our Board. A description of the specific experience, qualifications, attributes, and skills that led our Board to conclude that each of the nominees should serve as director follows the biographical information of each nominee. The directors reflect the diversity of the Company’s stockholders, employees, customers, and communities.

		Director Since		Committees
Name and Principal Occupation	Age	Director Since	Independent	A	C	F	NG	S
Gregory E. Aliff Former Vice Chairman and Senior Partner of U.S. Energy & Resources, Deloitte LLP	68	2015	YES
Terry P. Bayer Former COO of Molina Healthcare, Inc.	71	2014	YES
Shelly M. Esque Former Vice President and Global Director of Corporate Affairs of Intel Corporation	61	2018	YES
Martin A. Kropelnicki President & CEO of California Water Service Group	55	2013	—
Thomas M. Krummel, M.D. Emile Holman and Chair Emeritus of the Department of Surgery at Stanford University School of Medicine	70	2010	YES
Richard P. Magnuson Lead Director of California Water Service Group Managing Director of Orpheum Capital	66	1996	YES
Yvonne A. Maldonado, M.D. Professor of Global Health and Infectious Diseases, Departments of Pediatrics and Epidemiology and Population Health, Stanford University	66	2021	YES
Scott L. Morris Chairman of Avista Corporation	64	2019	YES
Peter C. Nelson Chairman of the Board of California Water Service Group	74	1996	—
Carol M. Pottenger Principal and Owner of CMP Global, LLC	67	2017	YES
Lester A. Snow Director and Former President of the Klamath River Renewal Corporation	70	2011	YES
Patricia K. Wagner Former Group President of U.S. Utilities for Sempra Energy	59	2019	YES
Number of meetings held during 2021				4	3	2	2	3

Chair

A: Audit

C: Organization and Compensation

Vice Chair

F: Finance and Capital Investment

NG: Nominating/Corporate Governance

Member

S: Enterprise Risk Management, Safety, and Security

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Proposal	For More Information	Board Recommendation
Proposal 2: Advisory Vote on Executive Compensation	Page 79	FOR
We closely align the total direct compensation of our officers with performance and appropriately balance officer focus on our short- and long-term priorities with annual and long-term rewards. Providing compensation that attracts, retains, and motivates talented officers is our committed goal. Our compensation programs reward excellent job performance, identify exceptional leadership, and represent fair, reasonable, and competitive total compensation that aligns officers’ interests with the long-term interests of our stockholders and customers.

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Proposal	For More Information	Board Recommendation
Proposal 3: Ratification of Independent Accountants	Page 82	FOR
The Board believes the continued retention of Deloitte & Touche LLP is in the best interests of the Company and its stockholders. The Board is recommending stockholder ratification of Deloitte & Touche LLP as the independent registered public accounting firm, to audit the Group’s books, records, and accounts for the year ending December 31, 2022.

Proposal	For More Information	Board Recommendation
Proposal 4: Approval of Amendment to the Group’s Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock	Page 83	FOR
We are asking stockholders to approve an amendment to the Group’s Certificate of Incorporation to increase the authorized number of common shares by 68,000,000 shares. Our Board of Directors believes that the availability of additional authorized shares of Common Stock is needed to provide us with additional flexibility to issue Common Stock for a variety of general corporate purposes as the Board of Directors may determine to be desirable. This includes, but is not limited to, using Common Stock as consideration for acquisitions, mergers, business combinations or other corporate transactions, raising equity capital, including pursuant to any future at-the-market equity programs, adopting additional employee benefit plans or reserving additional shares for issuance under existing plans, and implementing stock splits or stock dividends. Without stockholders approval of the Proposed Certificate Amendment, we may not have sufficient unissued and unreserved authorized shares to engage in similar transactions in the future.

Our Company

California Water Service Group is the third-largest publicly traded water utility in the United States, providing high-quality water and wastewater services to more than two million people in over 100 communities. Headquartered in San Jose, California, the Group consists of four regulated subsidiaries: California Water Service (Cal Water), Hawaii Water Service

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(Hawaii Water), New Mexico Water Service (New Mexico Water), Washington Water Service (Washington Water) and Texas Water Service (Texas Water). We secure, treat, test, store, and distribute water, and we provide wastewater collection and treatment services.

Fiscal 2021 Overview

2021 Financial Highlights

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Governance Highlights

Effective Board Leadership and Independent Oversight

•

Separation of Chairman and CEO roles, plus independent Lead Director with well-defined responsibilities

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Executive sessions led by independent Lead Director at Board meetings

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Ongoing review of the Board composition and succession planning

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Focus on the diversity, experience, skills, and attributes that enhance our Board

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Mandatory director retirement at age 75

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Substantial majority of independent directors and all-independent committees

Overview of Corporate Governance

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Code of Conduct for Directors, Officers, and Employees

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Clawback policy

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Stock ownership guidelines for executive officers and directors

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Prohibition on short sales, transactions in derivatives, and hedging and pledging of stock by directors and executive officers

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Annual review of committee assignments and committee chairs

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Annual committee assessments

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Integrated active risk management

Stockholder Rights

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No dual-class common stock structure

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Annual election of all directors

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Majority voting for directors in uncontested elections

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No supermajority voting requirements in governing
documents

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Stockholder right at 10% threshold to call a special
meeting

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Annual Advisory vote for say-on-pay

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Board Tenure

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Stockholder Engagement and Responsiveness

Our Board and management value the views of our stockholders and believe that maintaining an active dialogue with them is important to our commitment to enhance long-term stockholder value. For fiscal year 2021, we received 93% of the votes cast on the Say-on-Pay advisory vote taken at the 2021 Annual Meeting of Stockholders.

As illustrated in the table below, our Board has been responsive to stockholder feedback. Over the past several years, we have made numerous changes to our governance and executive compensation programs and related disclosures based on feedback from our stockholders and our annual review of market practices.

	Recent Governance and Executive Compensation Changes
	Governance • Formed the Enterprise Risk Management, Safety, and Security Committee • Environmental, social, and governance (ESG) items are overseen by the Nominating/Corporate Governance Committee • Adopted four new policies: Environmental Sustainability; Diversity, Equality, and Inclusion; Political Engagement; and Human Rights • Published our first ESG report with disclosure aligned with the Sustainability Accounting Standards Board (SASB) Water Utilities & Services Industry Standards and in reference to Global Reporting Initiate (GRI) standards • Included environmental leadership in the 2020 long-term incentive compensation program for the three-year performance period 2020—2022 and affordability and rate design in the 2021 long-term incentive compensation program for the three-year performance period 2021—2023			Compensation • Continued emphasis on allocating long-term incentive compensation to performance-based equity awards • Modified the performance criteria used for long-term and short-term incentive compensation programs • Revised the methodologies used to determine our Supplemental Executive Retirement Plan’s (SERP) actuarial assumptions and amended the plan, increasing the plan’s unreduced retirement age from 60 to 65 • Conducted an independent, third-party review of: • Our President and CEO’s compensation • Our executive short-term and long-term incentive compensation programs • Our proxy peer group • Updated our peer group to reflect industry changes

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Environmental, Social, and Governance Highlights

As a company, we have always stood for “doing the right thing.” We strive to make the world a better place and take pride in our long-standing efforts to provide safe water at affordable rates, plan for our customers’ future water needs, be responsible stewards of the environment, invest and give back to our communities, have the best-trained employees, and maintain high ethical standards. This commitment is instilled in our shared purpose, which is to enhance the quality of life for our customers, communities, employees, and stockholders.

Our Approach to Environmental, Social, and Governance (ESG)

As the world continues to face unprecedented challenges and the impacts of climate change become increasingly evident, we remain committed to contributing to a sustainable future and a high quality of life for our customers, communities, stockholders, and employees. To do so, we integrate sustainability across our business, enable cross-functional collaboration, and regularly evolve our approach to adjust to the changing landscape. We prioritize ESG focus areas based on the importance to our business and to our stakeholders, which informs ongoing elements of our broader ESG program and priorities, including ESG reporting and disclosure, objective-setting, integration with our corporate strategy, and internal and external stakeholder engagement efforts.

In 2021, we established ESG objectives, formalized our ESG governance structure, developed a climate change strategy, and performed thorough climate analyses. We developed objectives for key ESG topics in 2021 to drive performance and further embed sustainability into our strategic framework. Through this goal-setting process, we conducted a gap assessment to determine where existing corporate initiatives, strategic plans, and Enterprise Risk Management efforts did not sufficiently address higher-priority ESG topics. Based on this assessment, we identified a subset of ESG topics on which to focus and worked closely with our internal subject matter experts and company leadership to develop time-bound, measurable, short- and long-term ESG objectives. We believe this process fosters accountability, establishes milestones, allows for performance tracking and reporting, and further incorporates ESG into our business strategy. Through our strategic framework and objective-setting process, we have also mapped and further integrated these ESG topics into our Enterprise Risk Management process to align our focus areas. This provides direction for our executive leaders and enables strategic action to address risks while improving ESG performance.

To further drive ESG progress, we have also implemented a formal structure for ESG governance to designate responsibility and guide our execution. Our full Board oversees execution of our climate change strategy, and the Nominating/Corporate Governance Committee oversees our ESG program and reporting. The committee and/or the full Board are updated by executive leadership on ESG matters as needed and at least annually. Topics typically covered in these updates may include introduction of new strategic ESG initiatives, progress on ESG objectives and existing initiatives, results of relevant studies and reports, current and emerging ESG trends and regulations, and more. At the executive level, our officers discuss and manage our corporate responsibility and sustainability practices. To lead the Group’s strategy, our ESG Executive Advisory Council monitors material ESG issues and is responsible for critical decision-making related to ESG initiatives. Our ESG Executive Advisory Council includes our VP, Customer Service & Chief Citizenship Officer, who provides oversight for specific risks and commitments related to ESG.

ESG Report

Our 2021 Environmental, Social, and Governance (ESG) Report covers our activities from January 1, 2021 to December 31, 2021 and commemorates the fifth year of reporting on our ESG activities. The report aligns with the Sustainability Accounting Standards Board (SASB) Water Utilities and Services Industry Standard, and references the 2021 Global Reporting Initiative (GRI) Universal Standards and most recent version of each relevant Topic Standard. The full report, including additional information on the following topics, may be accessed at www.calwatergroup.com/esg2021. Web links are provided throughout this proxy statement for convenience and are inactive textual references only. The content on the referenced websites does not constitute a part of, and is not incorporated by reference into, this proxy statement.

Workplace and Employee Safety

We are dedicated to conducting business in a manner that protects and promotes the health and safety of our employees, those involved with our operations, and the communities where we work. Our employees are our most valuable asset; therefore, our philosophy is that health and safety should be a vital part of everything we do. We regard applicable health

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and safety legislation as a minimum standard, and are committed to complying with and striving to exceed that minimum. Our occupational health and safety management system, which applies across our employee population, structures our approach to maintain an accident-free and healthy work environment. We strive to instill a culture of safety that continues to strengthen as employees leverage tools, training, and resources for hazard identification and mitigation. Examples that demonstrate our commitment to the safety and well-being of our employees include the following:

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Development of local safety committees to promote safe practices through performing job safety analyses, supporting collaborative efforts to mitigate risks, and reviewing safety standards with employees to promote hazard awareness

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Engagement with our union workforce through the Power4America (P4A) program to train union members to become safety ambassadors, who in turn train and audit supervisors and other union members, provide guidance on leading safety practice, and review safety processes in the field

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Performance of job safety analyses to identify potential hazards, record trends in our compliance, and highlight practices to reduce risk

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Implementation of a Stop Work Authority Program policy, empowering employees to pause tasks if health, safety, or environmental risks are observed, as well as a policy to prevent punishment or retribution for exercising Stop Work Authority

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Continued execution of a hands-on vehicle safety program, incorporating a specific focus on training employees to drive safely, addressing the causes of distracted driving, and implementing driving policies that promote consistency across departments and locations

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Providing safety training to improve employee safety and risk awareness and preparation as well as offering specialized training relevant to specific teams and/or roles based on their exposure to safety risks

Additionally, as the pandemic continues, we prioritize health and safety for our workforce by working to minimize exposures and implementing best practices. Our safety team updated our COVID-19 Prevention Plan to align with Centers for Disease Control and Prevention (CDC) and OSHA requirements. In our facilities, we continue to conduct additional cleanings, enable social distancing, require screening processes, distribute personal protective equipment, implement COVID-19 safety training, provide individual pods for each building, and perform COVID-19 district validation audits. To minimize risk of exposure, we updated our employee travel policy to limit traveling and to outline requirements for testing and quarantine after traveling. We provide free on-site COVID-19 testing services on a regular basis for employees at our San Jose, California campus and provide COVID-19 test kits for our field employees. Our return-to-work plan includes staggered shifts and a phased approach to safely bring employees back in stages, which should allow us to maintain support for our customers and improve efficiency. We have collaborated with our unions on next steps and increased our vaccination rates by offering cash bonuses to incentivize employees.

Diversity, Equality, and Inclusion

As part of our commitment to diversity and equality, we enforce a zero-tolerance approach to discrimination, harassment, and retaliation, and we provide equal opportunity regardless of age, sex, race, ethnicity, ancestry, religion, creed, citizenship status, disability, national origin, marital status, military status, sexual orientation, gender identity, socio-economic status, or any other characteristic protected by law or any other non-job-related factor or activity. We continue to promote inclusive hiring processes and maintain respect for diversity throughout the Company at all levels, from the Board of Directors to entry-level employees.

To support diverse recruitment and develop broader outreach, we:

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Leverage targeted job boards and partner with local community colleges

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Enhance our hiring selection process by providing more diverse panels of interviewers and training our teams to prevent bias during the selection process

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Annually analyze pay equity for diversity factors, including gender, within our business

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Factor diversity into our selection of high-potential leaders in our leadership development program

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Cultivate an inclusive work environment and encourage people to share their experiences through events that discuss cultural and ethnic awareness

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Provide regular training to enhance inclusion throughout the Company, including sexual harassment avoidance training and an annual training on unconscious bias

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Source from women-, minority-, veteran-, disabled veteran-, and LGBTQ-owned suppliers

The graphs below represent the diversity of the employees based on voluntary self-identification.

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Our public Diversity, Equality, and Inclusion Policy outlines our commitments for this topic. Additional information on this topic may be accessed at www.calwatergroup.com/esg2021.

Human Capital Management

To attract, retain, and develop the best talent, we provide competitive benefits, engage our employees to foster supportive environments, and develop their capabilities and expertise. We regularly update our human resources policies and processes to contribute to a stronger workforce, reflect our dedication to equal opportunity, diversity, and inclusion, and improve retention and satisfaction.

Talent Attraction and Retention

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Our refreshed hiring process involves flexible interview format options and provides guidelines on interview questions and rating factors

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Our managers are trained on unconscious bias and instructed to consider the impacts of a hire on the organization

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We partner with local high schools, trade schools, and colleges to educate students about potential careers in the water industry

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Each year, we employ two surveys to assess employee satisfaction and engagement, share results with our officer team, and work with local management to improve our performance

Training and Development

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We promote internal hiring by encouraging our current employees to apply to higher positions and offering an interim promotion program

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We provide consistent, streamlined training for employees to develop leadership skills and become managers

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Our 18-month-long Future Leaders of Water (FLOW) program offers select high-potential managers an opportunity to improve leadership skills

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We incentivize employees to achieve certifications beyond the minimum requirements by offering incentives and tuition reimbursement

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Compensation, Benefits, and Employee Well-Being

We offer competitive wages and generous benefits for employees including:

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A commuter benefits program that encourages alternative modes of transportation

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An Employee Assistance Program that provides childcare and eldercare resources

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Our Critical Incident Response Management (CIRM) program that trains employees across the Company to provide peer-to-peer emotional support for coworkers who have experienced stress, loss, grief, change, or other traumatic events

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Financial wellness education, including planning tools and investment advisory services

Labor Relations and Management

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We respect the right to freedom of association and collective bargaining, and we honor an employee’s right to choose to be represented or not

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We engage with our unions in productive discussions to review business matters and mitigate potential issues

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We collaborate with our unions to support career development for our employees and offer applicable safety and functional training

Corporate Responsibility and Sustainability

As a steward of our planet’s most precious resource, the sustainability of our business is inextricably linked to the sustainability of our water supply and the well-being of our stakeholders. In our increasingly changing and interconnected world impacted by climate change, a global pandemic, social tensions, and technological innovations, it is more important than ever to build corporate responsibility, sustainability, and resilience into everything we do.

No single ESG topic stands alone, so we continually work to address the interconnections between them and apply an interdisciplinary approach to providing a sustainable supply of safe, affordable water for our customers. The graphic below depicts the key linkages between some of the various elements of how we protect our planet.

Managing Water Supply

Increasing System Efficiency

Reducing Water Consumption

We evaluate the long-term supply of groundwater and surface water to monitor changes in availability to meet demand. To help secure long-term water supply, we strive to purchase and produce recycled water and incorporate projects that enhance treatment, increase supplies, and replenish groundwater aquifers.

To preserve the water in our own distribution network, minimize water loss, and reduce energy required to pump water, we install and upgrade infrastructure that is designed to enhance efficiency. We incorporate technology that is designed to allow us to quickly identify and address leaks, and we continue to improve our metering and reporting to understand opportunities for improvement.

Customer conservation helps to protect availability of water for the future, and it reduces the energy needed to deliver water. We target opportunities to promote conservation and efficiency by educating our customers, offering programs for water-efficient appliances, and providing financial incentives that encourage reduced water consumption.

	Mitigating and Adapting to Climate Change
	Complex interdependencies impact the supply and demand of water. The energy we consume to provide water and wastewater services for our customers can contribute to climate change, which increases the likelihood and severity of droughts that reduce the availability of water and emergency weather events that may disrupt our systems. Lowering energy demand by increasing customer water-use efficiency—paired with minimizing energy usage in our own facilities, fleets, and distribution network—can mitigate climate change and reduce impacts to our water supply and systems. Additionally, reducing water consumption and developing diverse water supplies can help our business adapt to the changing water availability and enable continuous water delivery for our customers.

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	Promoting Affordability
	We continually aim to preserve affordability for our customers through our strategic efforts to manage our water supply, distribution, and consumption. The critical need to invest in water system infrastructure, increasingly stringent water quality standards, and rising costs all impact the overall cost of providing a safe, reliable water supply. We focus on operational efficiencies, rate design, and robust conservation programs to preserve affordability for customers, with an emphasis on low-income communities.

We are dedicated to managing climate-related risks and opportunities throughout the Group. We align our management of climate change with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), starting at the highest level of leadership. In addition to reviewing climate risks, the full Board of Directors is involved in discussions of our climate mitigation and adaptation. The Board also formally approved and oversees execution of our climate change strategy. Within our executive leadership team, the CEO spearheads the planning and execution of our climate change strategy, and our VP, Customer Service & Chief Citizenship Officer oversees all climate-related efforts. The Strategy & Operating Committee, comprising senior officers, oversees our strategy for energy management as part of our plans to reduce our environmental footprint and contributions to climate change.

To drive our climate change strategy, in 2021 we completed a Climate Change Risk Assessment and Adaptation Framework to identify climate-related risks and opportunities that could impact our business over various future time horizons and two greenhouse gas concentration trajectories to capture a range of potential future climate scenarios. Conducted at the district level to provide actionable insights, this assessment leverages estimated projections to identify and prioritize the climate-related impacts to our operations, facilities, and water supply portfolio; helps us more fully understand and integrate climate-related impacts into our demand forecasts; and develops the steps for prioritizing actions for addressing climate risks over time.

Acknowledging the potential and real impacts of these climate-related risks to our business, our climate strategy focuses on mitigation and adaptation across our value chain—in sourcing, treatment and distribution, and community engagement. We adapt and plan for impacts to our water supply and infrastructure, anticipate shifts in customer demand, and work to protect our watersheds. As part of our efforts to enhance our fleet, facilities, and infrastructure for treatment and distribution, we continue to increase efficiency, reduce the energy required to deliver water to customers, and advocate for climate-related projects to systematically improve performance. Lastly, we continue to expand customer water conservation programs, communicate with our customers about associated energy savings, and share summaries of climate change monitoring and adaptation studies with our communities. Additional information on this topic may be accessed at www.calwatergroup.com/esg2021.

Public Policy and Political Involvement

Our political involvement is policy driven, nonpartisan, and transparent. It is intended to benefit our customers, communities, employees, and stockholders by advocating for affordability, water quality, sustainability, and equality for our customers, as well as safeguarding our position as a leading provider of water service in the communities we serve. In addition to following applicable regulations, we set clear internal expectations for our employees and seek to align our activities with our values and objectives. Our Community Affairs and Government Relations team manages our political donations in accordance with local, state, and federal laws and regulations, and oversees two employee-funded Political Action Committees (PACs). Our Rates Department provides oversight for our relationship with the California Public Utilities Commission (CPUC) and examines regulatory impacts.

The Director of Community Affairs and Government Relations reports directly to the Vice President, Customer Service and Chief Citizenship Officer, who provides periodic summaries to the President & CEO. In turn, the President & CEO briefs the Board on pertinent legislative updates in alignment with our Political Engagement Policy. Additionally, the VP, Customer Service and Chief Citizenship Officer provides an annual update on the Company’s political contribution process to the Nominating/Corporate Governance Committee of the Board of Directors. Our political contributions, advocacy efforts, and focus areas can be found in public records. We maintain transparency in our positions, and we file a quarterly Report of Lobbyist Employer in accordance with California Government Code Section 86116. We do not work with contract lobbyists in any states other than California, and none of our employees are registered as lobbyists.

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CORPORATE GOVERNANCE MATTERS

	PROPOSAL 1 — ELECTION OF DIRECTORS
	Our Board of Directors unanimously recommends that you vote “FOR” the election of each of the following nominees.

The Nominating/Corporate Governance Committee assesses the composition of and criteria for membership on the Board and its committees on an ongoing basis in consideration of our current and future business and operations. In fulfilling this responsibility, the Nominating/Corporate Governance Committee takes a long-term view and seeks a variety of occupational and personal backgrounds on the Board in order to obtain a range of viewpoints and perspectives and to enhance the diversity of the Board as a group.

The Nominating/Corporate Governance Committee considers a variety of factors, including our long-term strategy, the skills and experiences that directors provide to the Board (including in the context of our business strategy), the performance of the Board and the organization, the Board’s director retirement policy, the Board’s view that a balanced and effective board should include members across a continuum of tenure, and the belief that valuable insights can be gained from diversity of gender, race, ethnic and national background, geography, age, and sexual orientation. The Board assesses its effectiveness in this regard as part of the annual board and director evaluation process. As a result of these long-term strategic assessments, the Nominating/Corporate Governance Committee has articulated a set of principles on board composition, which include:

	Board Composition
	Diversity			Our Board is comprised of members who demonstrate a diversity of thought, perspectives, skills, backgrounds, experiences, and independence and has a goal of identifying candidates that can contribute to that diversity in a variety of ways, including ethnically and gender diverse candidates.
	Board Skills			Our Board is composed of a collective set of skills to address corporate challenges, especially in the areas of business strategy, financial performance, utility regulation, risk management, cybersecurity, technology and enterprise innovation, and executive talent and leadership, and should evolve with the organization’s business strategy.
	Industry Experience			Our Board seeks and retains members with industry experience, including water, utility, and technology, that align with our long-term strategy; recognizes the utility industry is complex; and understands the importance of having directors who have experienced challenging business cycles and can share their knowledge.
	Tenure			Our Board retains members across the director tenure spectrum to promote effective oversight and embrace innovation, as well as a changing market and customer expectations.
	Board Size			Our Board considers the appropriate size of the board in relation to promoting active engagement, open discussion, effective risk management, and productive dialogue with management; continuously assesses the bench of successors for Board leadership positions in both expected and unexpected departure scenarios.

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Director Nomination Process

The Nominating/Corporate Governance Committee’s regular evaluation of the composition of, and criteria for membership on, the Board is ongoing. This evaluation includes an annual review of committee assignments, committee chairs, committee effectiveness, and director succession planning. Incumbent directors eligible for re-election, nominees to fill vacancies on the Board, and any nominees recommended by stockholders all undergo a review by the Committee.

Through a variety of sources, the Nominating/Corporate Governance Committee identifies new director nominees and will consider director nominees recommended by stockholders in the same manner it considers other nominees. This process is described in the following section. Stockholders seeking to recommend nominees for consideration by the Nominating/Corporate Governance Committee should submit a recommendation in writing describing the nominee’s qualifications and other relevant biographical information, together with confirmation of the nominee’s consent to serve as director. Please submit this information to the Corporate Secretary, California Water Service Group, 1720 North First Street, San Jose, California 95112-4508.

Stockholders may also nominate directors by adhering to the advance notice procedure described under “Questions and Answers About the Proxy Materials and the Annual Meeting — How can a stockholder propose a nominee for the Board or other business for consideration at a stockholders’ meeting?” on page 92 in this Proxy Statement.

Director Criteria

Our Board believes our directors should possess a combination of skills, professional experience, and a diversity of backgrounds necessary to oversee our business. Also, the Board believes every director should possess certain attributes as reflected in the Board’s membership criteria.

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The Nominating/Corporate Governance Committee’s charter requires that as part of the search process for each new candidate, the Committee will actively seek out diverse candidates to include in the pool from which candidates are chosen. The Committee focuses on the development of a Board composed of directors that meet the criteria set forth below:

	Director Criteria
	Personal Characteristics			• High personal and professional ethics, integrity and honesty, good character, and sound judgment • Independence and absence of any actual or perceived conflicts of interest • The ability to be an independent thinker
	Commitment to the Organization			• A willingness to put in the time and energy to satisfy the requirements of Board and committee membership, including attendance and participation in Board and committee meetings of which they are a member and the annual meeting of stockholders, and be available to management to provide advice and counsel • Possess, or be willing to develop, a broad knowledge of critical issues facing the organization
	Diversity			• Diversity, including the candidate’s professional and personal experience, background, perspective, and viewpoint, as well as the candidate’s gender and ethnicity
	Skills and Experience			• Value derived from each nominee’s skills, qualifications, experience, and ability to impact long-term strategic objectives • Solid educational background • Substantial tenure and experience in leadership roles • Business and financial experience • Understanding the intricacies of a public utility • Experience in risk management • Additionally, Section 2.9 of our bylaws contains requirements that a person must meet to avoid conflicts of interest that would disqualify that person from serving as a director
	Identification of Director Nominees			• Through a variety of sources, the Nominating/Corporate Governance Committee identifies new director nominees and will consider director nominees recommended by stockholders in the same manner it considers other nominees. This process is described in “Director Qualifications and Diversity” and found elsewhere in this Proxy Statement.
	Retirement Age of Directors			• We have established a mandatory retirement age for all directors. All directors must retire no later than the Annual Meeting that follows the date of the director’s 75th birthday. Additionally, an employee director must retire as an employee no later than the Annual Meeting that follows the date of his or her 70th birthday, but may remain on the Board at the discretion of the Board of Directors.
	Executive Sessions of the Board			• Under our Corporate Governance Guidelines, the non-management directors meet at least four times each year in executive session without management present, and the independent directors meet in executive session at least once a year. The Lead Independent Director, Richard P. Magnuson, chairs these sessions.

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Information about our directors and nominees as of April 13, 2022 is as follows:

Name

Age

California
Water
Service
Group
Position

Current
Term
Expires

Director
Since

Independent

Occupation

Other
Board
Experience

Public
Utilities
or Public
Health
Experience

Gregory E. Aliff

Director

2022

2015

Yes

Former Vice Chairman and Senior Partner of U.S. Energy & Resources, Deloitte LLP

Yes

Terry P. Bayer

Director

2022

2014

Yes

Former COO of Molina Healthcare, Inc.

Yes

Shelly M. Esque

Director

2022

2018

Yes

Former Vice President and Global Director of Corporate Affairs of Intel Corporation

Yes

Martin A. Kropelnicki

President & CEO and Director

2022

2013

President & CEO of California Water Service Group

Yes

Thomas M. Krummel, M.D.

Director

2022

2010

Yes

Emile Holman and Chair Emeritus of the Department of Surgery at Stanford University School of Medicine

Yes

Richard P. Magnuson

Lead Director & Chair of the Board’s Executive Sessions

2022

1996

Yes

Managing Director of Orpheum Capital

Yes

Yvonne A. Maldonado, M.D.

Director

2022

2021

Yes

Professor of Global Health and Infectious Diseases, Departments of Pediatrics and Epidemiology and Population Health, Stanford University

Yes

Scott L. Morris

Director

2022

2019

Yes

Chairman of Avista Corporation

Yes

Peter C. Nelson

Chairman of the Board

2022

1996

Chairman of the Board of California Water Service Group

Yes

Carol M. Pottenger

Director

2022

2017

Yes

Principal and Owner of CMP Global, LLC

Yes

Lester A. Snow

Director

2022

2011

Yes

Director and Former President of the Klamath River Renewal Corporation

Yes

Patricia K. Wagner

Director

2022

2019

Yes

Former Group President of U.S. Utilities for Sempra Energy

Yes

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Director Nominees

Upon the recommendation of the Nominating/Corporate Governance Committee, our Board has nominated for election at the 2022 Annual Meeting of Stockholders a slate of twelve director nominees. All of the nominees were most recently elected by stockholders at the 2021 Annual Meeting. All directors are elected annually to serve until the next Annual Meeting or until their respective successors are elected.

Gregory E. Aliff

Independent
Age: 68
Director Since 2015


	Committees: • Chair, Audit • Enterprise Risk Management, Safety, and Security Public Board Directorships: Current: • New Jersey Resources Corp Previous: • SCANA Corporation				Retired Mr. Aliff is a retired Vice Chairman and Senior Partner, US Energy and Resources, at Deloitte LLP. From 2012 to his retirement in 2015, Mr. Aliff led Deloitte’s US Sustainability Services, which focused on industrial and commercial water and energy management. From 2002 to 2012, he led Deloitte’s US Energy and Resources practice, where he oversaw all professional services to the sector. Mr. Aliff earned his Bachelor of Science in accounting and his Master of Business Administration from Virginia Tech. He is a Certified Public Accountant and a designated Board Leadership Fellow of the National Association of Corporate Directors (NACD). He also holds a CERT Certificate in Cybersecurity Oversight from NACD. In addition to his public company directorships, Mr. Aliff has also served on the board of several non-profit organizations. Mr. Aliff brings extensive accounting, auditing, and financial reporting experience to the Board, with specific expertise in both the public utility and energy and resources industries. He has in-depth experience in strategy, enterprise risk management, and regulatory affairs from his many years providing professional services to numerous major utilities. Mr. Aliff’s deep understanding of public utility markets and the breadth of experience he has gained from working with public companies make him a valuable resource to the Board.

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Terry P. Bayer

Independent
Age: 71
Director Since 2014


	Committees: • Chair, Finance and Capital Investment • Organization and Compensation • Audit Public Board Directorships: Previous: • Apria Healthcare Group, Inc.				Retired Ms. Bayer is the former Chief Operating Officer (COO) for Molina Healthcare, Inc., a managed care company that provides solutions to meet the healthcare needs of low-income individuals and families who participate in government programs, including Medicaid, Medicare, and Marketplace. She held that position from 2005 until her retirement in February 2018. She was previously Executive Vice President of Health Plan Operations and also held management positions at Family Health Plan (FHP), Maxicare, Matria Healthcare, and AccentCare, Inc. Ms. Bayer currently serves as a board director of Pack4U, a personalized medication delivery and remote patient monitoring company. She holds a Juris Doctor Degree from Stanford University, a Master of Public Health from the University of California, Berkeley, and a Bachelor of Arts in communication from Northwestern University. Ms. Bayer brings senior leadership, financial, operational, and public health expertise to the Board from her service as the COO of Molina Healthcare, Inc., a public company. She has many years of experience as an operating executive with a strong focus on government program compliance, public health and administration, and customer service. Ms. Bayer’s significant background and experience in healthcare supports the Board’s efforts in overseeing and advising on employee health matters. Her previous experience as a director of Apria Healthcare Group, Inc. and her compliance and compensation committee memberships, allow Ms. Bayer to contribute to the Board.

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Shelly M. Esque

Independent
Age: 61
Director Since 2018


	Committees: • Nominating/Corporate Governance • Enterprise Risk Management, Safety, and Security				Retired Ms. Esque, prior to her retirement in 2016, served as Vice President and Global Director of Corporate Affairs at Intel Corporation, a leader in the semiconductor industry. Overseeing professionals in more than 35 countries, she was responsible for enhancing Intel’s reputation as the world’s leading technology brand and corporate citizen. She also served as both president and chair of the Intel Foundation. In her capacity as a leader of Intel’s corporate social responsibility, community, education, foundation, and government relations worldwide, Ms. Esque represented Intel at numerous events, including the World Economic Forum, World Bank, UNESCO, and forums promoting women in the workplace. Ms. Esque received the Greater Phoenix Chamber of Commerce 2011 ATHENA Businesswoman of the Year Award for excellence in business and leadership, exemplary community service, and support and mentorship of other women. She was also recognized by AZ Business Magazine as one of the 50 Most Influential Women in Arizona. Ms. Esque is active on many non-profit boards, including Basis Charter Schools, Take the Lead, and the Boyce Thompson Arboretum, among others. Ms. Esque’s strong understanding of corporate social responsibility, education, media relations, and government and community affairs makes her a valuable resource to the board.

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Martin A. Kropelnicki

Age: 55
Director Since 2013


					President & CEO, California Water Service Group Mr. Kropelnicki is President & CEO of the Group. Mr. Kropelnicki joined the Group as Vice President, Chief Financial Officer (CFO) and Treasurer in 2006 and was named President and COO in 2012. He then was appointed President & CEO of the Group effective September 1, 2013. He has over 33 years of experience in finance and operations, including 15-plus years as CFO at publicly listed companies. He has held executive positions at PowerLight Corporation, Hall Kinion & Associates, Deloitte & Touche Consulting Group, and Pacific Gas & Electric Company. He serves as a director for the Bay Area Council and the California Foundation on the Environment & Economy, and is a member of the Silicon Valley Leadership Group. Mr. Kropelnicki is the past President of the National Association of Water Companies (NAWC) and currently serves on the NAWC Executive Committee. He holds a Bachelor of Arts and Master of Arts in business economics from San Jose State University. In 2016, Mr. Kropelnicki was awarded the United States Navy Memorial Fund’s Naval Heritage Award. He is the 12th recipient of this award since its inauguration. Mr. Kropelnicki is well positioned to lead the Group’s management team and give guidance and perspective to the Board. His experience as the former CFO of the Group provides expertise in both corporate leadership and financial management and his management experience enables him to offer valuable perspectives to our strategic planning, rate making, and budgeting, along with operational and financial reporting.

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Thomas M. Krummel, M.D.

Independent
Age: 70
Director Since 2010


	Board Committees: • Chair, Organization and Compensation • Nominating/Corporate Governance Public Board Directorships: Current: • Procept BioRobotics Corporation				Emile Homan and Chair Emeritus, Department of Surgery, Stanford University Dr. Krummel is the Emile Holman Professor and Chair Emeritus of the Department of Surgery at Stanford University School of Medicine and former co-director of the Stanford Biodesign program. A leader in his field, he has been honored with the William E. Ladd Medal by the American Academy of Pediatrics, the Albion Walter Hewlett Award by the Stanford Department of Medicine, the Henry J. Kaiser Family Foundation Award for Excellence in Clinical Teaching; the John Austin Collins, M.D. Memorial Award for Outstanding Teaching and Dedication to Resident Training, and the Lucile Packard Children’s Hospital Recognition of Service Excellence. Dr. Krummel is currently chair of the board of directors at Fogarty Innovation, a not-for-profit medtech educational incubator, a venture partner at Santé Ventures, and a board member for Morgridge Institute for Research at the University of Wisconsin. Dr. Krummel brings to the Board experience in professional training and development as well as a familiarity with medical, public health, and science issues. He offers the Board unique insight on public health matters, including healthcare policy and legislation, drinking water quality, and employee health.

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Richard P. Magnuson

Independent
Age: 66
Director Since 1996


	Lead Independent Director Board Committees: • Chair, Nominating/Corporate Governance • Audit • Finance and Capital Investment Public Board Directorships: Previous: • Rogue Wave Software • IKOS System, Inc. • OrCAD Sytems Corporation				Managing Director of Orpheum Capital Mr. Magnuson is a venture capital investor and our Lead Independent Director. He is Managing Director of Orpheum Capital, a private investment fund. From 1984 to 1996, he was a general partner of Menlo Ventures, a venture capital firm. Mr. Magnuson holds an undergraduate degree in economics, and a law degree and a Master of Business Administration from Stanford University. In addition to his previous public company experience, Mr. Magnuson has served on the boards of several privately held companies. With his legal and venture capital background, Mr. Magnuson brings valuable financial and business strategy expertise to the Board. His past experience on the boards of other public companies, as well as his insight on financial and operational matters, adds value to the Board. His past and current Board service also provides insight on corporate governance practices.

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Yvonne (Bonnie) A. Maldonado, M.D.

Independent
Age: 66
Director Since 2021


	Board Committees: • Nominating/Corporate Governance • Enterprise Risk Management, Safety, and Security				Professor of Global Health and Infectious Diseases, Departments of Pediatrics and Epidemiology and Population Health, Stanford University Dr. Maldonado is currently a pediatric infectious diseases epidemiologist at Stanford University School of Medicine as well as the medical director of Infection Prevention and Control, and an attending physician at Packard Children’s Hospital at Stanford. She is also a professor in the Departments of Pediatrics and Health Research and Policy, chief of the Division of Infectious Diseases, director of Global Child Health, and senior associate dean for faculty development and diversity at Stanford’s School of Medicine. Dr. Maldonado is currently the chair of the American Academy of Pediatrics Committee on Infectious Diseases, serves on the board of the Lucile Packard Foundation for Children’s Health, and is a member of numerous medical associations and committees. Nationally and internationally renowned for her knowledge, research, and expertise in infectious and vaccine-preventable disease control and international health, Dr. Maldonado has led studies and investigations funded by the United States, CDC, WHO, NIH, and Gates Foundation worldwide on HIV, polio, and measles. Dr. Maldonado brings a unique perspective and valuable insight to the Board.

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Scott L. Morris

Independent
Age: 64
Director Since 2019


	Committees: • Organization and Compensation • Enterprise Risk Management, Safety, and Security Public Board Directorships: Current: • Avista Corporation Previous Board Directorship: • McKinstry				Chairman, Avista Corporation Mr. Morris has been Chairman of Avista Corporation, a publicly traded electrical and natural gas utility serving customers primarily in the Pacific Northwest, since January 2008. From January 2008 to October 1, 2019, he also served as Avista’s CEO, from January 2008 to January 2018 he served as its President, and from May 2006 to December 2007, he served as its President and Chief Operating Officer. Mr. Morris joined Avista in 1981 and his experience at the company includes management positions in construction and customer service and general manager of the company’s Oregon utility business. He is a graduate of Gonzaga University where he received his master’s degree from Gonzaga University in organizational leadership. He also attended the Stanford Business School Financial Management Program and the Kidder Peabody School of Financial Management. Mr. Morris serves on the board of McKinstry and on the Board of Trustees of Gonzaga University. He has served on a number of Spokane non-profit and economic development boards. Mr. Morris brings to the Board a deep knowledge and understanding of the utility industry, having spent his entire career in the industry. As a former senior executive, he also contributes senior leadership experience and valuable perspectives on strategy, operations, and business management.

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Carol M. Pottenger

Independent
Age: 67
Director Since 2017


	Board Committees: • Vice Chair, Enterprise Risk Management, Safety, and Security • Finance and Capital Investment • Nominating/Corporate Governance				Principal and Owner, CMP Global, LLC As principal and owner of CMP Global LLC, Ms. Pottenger’s organization, which was founded in 2014, provides consulting services in business development, process improvement, corporate governance, strategic planning, and cyber and information systems. The first female three-star Admiral in American history to lead in a combat branch, Ms. Pottenger commanded two ships, a logistic force of 30 ships, a Japan-based strike-group of eight ships, and the Expeditionary Force of 40,000 sailors during her 36 years in the U.S. Navy before retiring in 2013. She was also the senior U.S. Flag Officer responsible for military transformation and sensitive military topics such as counterterrorism and cybersecurity while on assignment with NATO. Ms. Pottenger brings unique experience to the board, ranging from operations to technology to risk management. A graduate of Purdue University in Lafayette, Indiana, she also serves on various private, defense, and non-profit boards, including the U.S. Navy Memorial Foundation in Washington, D.C., PricewaterhouseCoopers LLP Board of Partners and Principals, and Serco North America.

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Lester A. Snow

Independent
Age: 70
Director Since 2011


	Board Committees: • Chair, Enterprise Risk Management, Safety, and Security • Finance and Capital Investment • Organization & Compensation				Retired Mr. Snow has served as Secretary of the California Natural Resources Agency, Director of the California Department of Water Resources, Regional Director of the U.S. Bureau of Reclamation, Executive Director of the CALFED Bay Delta Program, and General Manager of the San Diego County Water Authority. He served as Executive Director of the California Water Foundation, an initiative of the Resources Legacy Fund, and serves on the board of the Klamath River Renewal Corporation. He holds a Master of Science Degree in water resources administration from the University of Arizona and a Bachelor of Science in earth sciences from Pennsylvania State University. Mr. Snow brings more than 40 years of water and natural resource management experience to the Board. His distinguished public service career enables him to assist the Board in addressing water and environmental issues as well as regulatory and public policy matters. Mr. Snow’s executive experience in the public sector provides the Board with critical insight on a variety of operational and financial matters.

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Patricia K. Wagner

Independent
Age: 59
Director Since 2019


	Committees: • Audit • Finance and Capital Investment Public Board Directorships: Current: • Apogee Enterprises • Primoris Services Corporation Previous: • SoCalGas				Retired Ms. Wagner, prior to her retirement in 2019, served as Group President, U.S. Utilities for Sempra Energy, an energy-services holding company whose subsidiaries include San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas), both California regulated utilities, as well as other companies operating in the electric and gas infrastructure business. Prior to her role as Group President, from 2017 to 2018 she served as Chairman and Chief Executive Officer of SoCalGas, one of the largest natural gas utilities in the country. She served as Executive Vice President of Sempra Energy in 2016, and as President and Chief Executive Officer of Sempra U.S. Gas & Power from 2014 to 2016. During her 24-year career in the utility sector, Ms. Wagner held a range of other leadership positions, including: Vice President of Audit Services for Sempra Energy; Vice President of Accounting and Finance for SoCalGas; Vice President of Information Technology for SoCalGas and SDG&E; and Vice President of Operational Excellence for SoCalGas and SDG&E. Ms. Wagner is currently a director of Apogee Enterprises, Inc., a public company that designs and develops commercial glass and metal products, and Primoris Services Corporation, a public company providing a wide range of specialty construction services, fabrication, maintenance, replacement, and engineering services. Ms. Wagner earned her Master of Business Administration from Pepperdine University and her bachelor’s degree in chemical engineering from California State Polytechnic University, Pomona. Ms. Wagner has immense working knowledge and familiarity with the California regulatory environment and has worked with the California Public Utilities Commission. Her deep understanding of regulatory affairs and experience working for an investor-owned utility make her a valuable asset to the Group. She also brings valuable accounting and finance, senior leadership, and operational experience to the Board.

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CORPORATE GOVERNANCE PRACTICES

We are committed to objective, independent leadership on our Board and each of its committees. In addition, our Board believes the active, objective, and independent oversight of management is central to effective Board governance and serves the best interests of all stakeholders, including customers, stockholders, regulators, suppliers, associates, and the general public.

Specifically, our Board has adopted Corporate Governance Guidelines comprised of rigorous governance practices and procedures. To maintain and enhance its independent oversight, our Board has implemented measures to further enrich Board composition, leadership, and effectiveness. These measures align our corporate governance structure with achieving our strategic objectives and enable our Board to effectively communicate and oversee our culture of compliance and in-depth risk management. Our Board frequently discusses business and other matters with the senior management team and principal advisors such as our legal counsel, auditors, consultants, and financial advisors. Our Board annually reviews and approves the Corporate Governance Guidelines and charters of the Board committees to align with evolving best practices and regulatory requirements, including the New York Stock Exchange (NYSE) corporate governance listing standards. The Corporate Governance Guidelines and the current charters for the Audit, Organization and Compensation, Finance and Capital Investment, Nominating/Corporate Governance, and Enterprise Risk Management, Safety, and Security committees are posted on our website at http://www.calwatergroup.com.

Corporate Governance Overview

Our corporate governance practices are substantially aligned with the Investor Stewardship Group’s (ISG) Corporate Governance Framework for U.S. Listed Companies, as shown in the table below.

	ISG Principle			Our Practice
	Principle 1 Boards are accountable to stockholders			• Annual election of all directors • Majority voting for directors in uncontested elections • Directors are required to offer to resign if they fail to receive a majority of votes cast • No supermajority voting requirements in governing documents • Stockholder right at 10% threshold to call a special meeting
	Principle 2 Stockholders should be entitled to voting rights in proportion to their economic interest			• No dual class common stock structure • Each stockholder is entitled to one vote per share • No cumulative voting for directors
	Principle 3 Boards should be responsive to stockholders and be proactive in order to understand their perspectives			• Proactive, year-round investor outreach program • Directors receive regular updates on investor feedback and are available for stockholder engagement • In response to investor feedback, over the last several years, we have, for example: • published our first Environmental, Social, and Governance report; • formed the Enterprise Risk Management, Safety, and Security Committee; • incorporated environmental leadership into our incentive compensation program; and • modified the performance criteria used for long-term and short-term incentive compensation programs

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	Principle 4 Boards should have a strong, independent leadership structure			• Independent Lead Director with well-defined responsibilities • Substantial majority of the Board is independent (10 of 12 director nominees or 82% of the Board) and Board committees are completely independent • Non-management directors meet at least four times each year in executive session without management present, and the independent directors meet in executive session at least once a year
	Principle 5 Boards should adopt structures and practices that enhance their effectiveness			• Continuous focus on Board refreshment, with a balanced mix of director tenures and five new directors joining the Board since 2017 • Increasing focus on Board diversity, with 5 female directors (42% of the Board) and 1 ethnically diverse director (8% of the Board) • Annual review of the Board, committees, Independent Lead Director, and individual directors • Limits on outside board service, with no director permitted to serve on more than 4 public company boards (including the Group) and directors who are public company executive officers not permitted to serve on more than 2 public company boards (including the Group) • Mandatory director retirement at age 75
	Principle 6 Boards should develop management incentive structures that are aligned with the long-term strategy of the company			• Target total direct compensation is heavily weighted towards performance, comprising 68% of CEO pay and 46% of other NEO pay in 2021, and appropriately balances short-term drivers of the Group’s success and long-term creation of stockholder value • Organization & Compensation Committee annually re-evaluates the mix of fixed and variable compensation in order to best attract, retain and incentivize talented officers who contribute to the long-term success of the Group • We incorporate a number of risk mitigation features into our executive compensation program, including stock ownership requirements, clawback provisions and anti-hedging and anti-pledging policies

Board Structure and Independence

Our Board encompasses the optimal mix of diverse backgrounds, experiences, skills, expertise, and an uncompromising commitment to integrity and thorough judgment. The Board thoughtfully advises and guides management as they work to achieve our long-term strategic goals. To promote sound board structure and independence standards, our Board adheres to the following policies and procedures:

•

Our Board is comprised of a substantial majority of independent directors

•

All directors are required to retire no later than the Annual Meeting that follows the date of the director’s 75th birthday

•

Our Board conducts an annual review of Board composition, committee effectiveness, and succession planning resulting in refreshment of the Board and a diversity of skills, attributes, and perspectives on the Board

•

Upon election at the annual meeting, the average tenure of the members of the Board will be approximately nine years

•

Directors are required to offer to resign if they fail to receive a majority of votes cast

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Board Oversight

Our Board is responsible for seeing that our organization is appropriately stewarding the resources entrusted to it and following legal and ethical standards. In addition, our Board has the fundamental and legal responsibility to provide oversight and accountability for the organization. By following key risk management principles, our Board provides a solid foundation of organizational oversight:

•

Understands the organization’s strategy and key drivers of success

•

Regularly assesses the risks in the organization’s strategy

•

Appropriately defines the role of the full Board and its standing committees specific to risk management and key risk oversight

•

Assesses the organization’s risk management system — including people, processes, and technology — to confirm resource appropriateness and sufficiency

•

Works with management to understand and agree on the types (and format) of risk information the Board requires and risk prioritization

•

Encourages dynamic and constructive risk dialogue between management and the Board, including a willingness to challenge assumptions

•

Closely monitors the potential and evolving risks to culture and the incentives structure

•

Oversees the critical alignment of strategy, risk, controls, compliance, incentives, and people

Director Orientation and Continuing Education

Our director education about California Water Service Group and our strategy, control framework, regulatory environment, and industry begins when a director is elected to our Board and continues throughout his or her tenure on the Board. Upon joining our Board, new directors are provided with a comprehensive orientation about our company, which includes an overview of director duties and our corporate governance, one-on-one sessions with the Chairman and President & CEO, and presentations by senior management and other key management representatives on the organization’s strategy, regulatory framework, and control framework. As directors are appointed to new committees or assume a leadership role, such as committee chair, they receive additional orientation sessions specific to such responsibilities.

Board and Committee presentations, educational briefings, discussions with subject matter experts on business, governance, regulatory, and control matters help to keep directors appropriately apprised of key developments in our business and in our industry, including material changes in regulation, so they can carry out their oversight responsibilities.

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Annual Evaluation of Board, Committees, and Independent Lead Director

Overview of Evaluation Process

Our Board and Committees maintain a regular and robust evaluation process to promote the effective functioning of our Board. It is important to examine Board, Committee, and director performance and to solicit and act upon feedback received from each member of our Board. Evaluations are intended to assess the effectiveness in board composition and conduct, meeting structure, materials and information, committee composition and effectiveness, strategic and succession planning, culture and exercise of oversight, as well as continued education and access to management.

	Annual Board Self-Evaluations
	As part of the evaluation, each Board member completes an anonymous, comprehensive questionnaire soliciting input on topics such as corporate governance issues, Board and committee culture, structure and meeting process, director interactions with each other and with management, management responsiveness, quality and quantity of information provided to the Board of Directors, strategic planning, and more.

	Summary of Written Evaluations
	Each Director’s anonymous responses to the questionnaire are sent to outside counsel retained by the Company at the Nominating/Corporate Governance Committee’s request. Outside counsel compiles the results of the evaluations into a report for the Nominating/Corporate Governance Committee and Lead Independent Director.

	Conversations
	Additionally, the Lead Independent Director has individual conversations throughout the year with each member of the Board, providing further opportunity for dialogue, feedback, and improvement.

	Board Review
	The responses to the questionnaires, in addition to other feedback provided by Board members through interviews and other communications, are then reviewed and compiled by our Lead Independent Director in order to determine strengths and areas for improvement. Those results are then discussed with the Governance Committee and the Board of Directors, and such results are used to improve Board and committee performance. Matters that require further assessment or additional follow-up are addressed at future Board or committee meetings, as applicable.

	Actions
	Our evaluation process typically generates robust comments and discussion with the Board, including with respect to Board composition and processes. These evaluation results have led to changes designed to increase Board effectiveness and efficiency. Examples include enhancements to meeting materials, the structure of the Board, responsibilities of committees, committee and executive session discussions, committee reports to the Board, Director onboarding, continuing education, and hands-on experiences with our business, senior leaders, and emerging talent throughout the Company.

Director Independence

As discussed in our Corporate Governance Guidelines, a substantial majority of the Board is comprised of independent directors. Based on the recommendation of the Nominating/Governance Committee, the Board determined that, other than Martin A. Kropelnicki and Peter C. Nelson, each of our director nominees (Gregory E. Aliff, Terry P. Bayer, Shelly M. Esque, Thomas M. Krummel, M.D., Richard P. Magnuson, Yvonne A. Maldonado, M.D., Scott L. Morris, Carol M. Pottenger, Lester A. Snow, and Patricia K. Wagner) is independent.

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Under the listing standards of the New York Stock Exchange, a director is independent if he or she has no material relationship, whether commercial, industrial, banking, consulting, accounting, legal, charitable, familial, or otherwise,

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with the organization, either directly or indirectly as a partner, stockholder, or executive officer of an entity that has a material relationship with us. Our Board makes an affirmative determination regarding the independence of each director annually, based on the recommendation of the Nominating/Corporate Governance Committee.

	Independence Standards
	The Board has adopted standards to assist in assessing the independence of directors, which are part of the Corporate Governance Guidelines available at http://www.calwatergroup.com. Under these standards, our Board has determined that a director is not independent if: • The director is, or has been within the last three years, an employee of any company that comprises the Group or an immediate family member is, or has been within the last three years, an executive officer of any company that comprises the Group. • The director has received, or has an immediate family member who has received, during any 12-month period during the last three years, more than $120,000 in direct compensation from companies that comprise the Group, other than director or committee fees and pension or other forms of deferred compensation for prior service. • The director, or an immediate family member, is a current partner of the Group’s internal or external auditor; the director is a current employee of such a firm; the director’s immediate family member is a current employee of such a firm who personally works on the Group’s audit, or the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Group’s audit within that time. • The director, or an immediate family member, is, or has been within the last three years, employed as an executive officer of another company where any of the Group’s present executive officers serves or served at the same time on that company’s compensation committee. • The director is a current employee, or has an immediate family member who is a current executive officer, of a customer or vendor or other party that has made payments to or received payments from companies that comprise the Group for property or services in an amount that, in any of the last three fiscal years, exceeded the greater of $1 million or 2% of the party’s consolidated gross revenues. • The director, or the director’s spouse, is an executive officer of a non-profit organization to which the Group makes, or in the past three years has made, payments that, in any single fiscal year, exceeded the greater of $1 million or 2% of the non-profit organization’s consolidated gross revenues
	In addition, our Board has determined that none of the following relationships, by itself, is a material relationship that would impair a director’s independence: • Being a residential customer of any service territory • Being a current executive officer or employee of, or being otherwise affiliated with, a commercial customer from which the Group has received payments that, in any of the last three fiscal years, did not exceed the greater of (i) 1% of the Group’s consolidated gross revenues for the year; or (ii) $500,000 • Being a current executive officer or employee of, or having a 5% or greater ownership or similar financial interest in, a supplier or vendor that has received payments from the Group that, in any of the last three fiscal years, did not exceed the lesser of (i) 1% of the Group’s consolidated gross revenues for the year; or (ii) $500,000 • Being a director of any of the Group’s subsidiaries

Directors inform the Board as to any relationships they may have with the organization and provide other pertinent information in annual questionnaires they complete, sign, and certify. The Board reviews relevant relationships to identify possible impairments to director independence and in connection with disclosure obligations. For those directors who reside in one of our service territories and are customers, our Board has determined that it is not a material relationship that would impair their independence under the above standards.

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Board Leadership Structure and Composition

Leadership Structure

Peter C. Nelson has served as Chairman of the Board since 2012. The roles of Chairman of the Board and CEO for the organization are separate. Our Board currently believes separating these roles is the most appropriate leadership structure, at this time, based on numerous factors, including the Board’s historical practice (which has predominantly been to separate the roles), its assessment of the organization’s leadership, and the organization’s current and anticipated needs. The Board attributes a portion of the historical success of its leadership model to the Chairman of the Board’s 17-plus years of service as the former President & CEO, including his industry knowledge and executive management skills, rather than by the particular leadership structure chosen. The Board believes that Mr. Nelson, who retired as CEO in 2013, brings significant experience in the water and public utility industries, making him best positioned to lead the Board as it oversees and monitors implementation of our business strategy, considers risks related to strategy and business decisions, and performs its oversight function.

Our Board reviews its leadership structure regularly to confirm that it remains appropriate for the Group. The Board retains the flexibility to change the leadership structure from time to time so that it can adjust, as appropriate, as the Group’s needs change.

Lead Independent Director

Our Lead Independent Director is selected annually from and by the independent directors, serves for a period of at least one year, and has expansive duties and authority as included in our Corporate Governance Guidelines.

Richard P. Magnuson currently serves as Lead Independent Director. Our Corporate Governance Guidelines list the Lead Independent Director’s responsibilities and authority including:

•

Presides at meetings of the Board in the absence of the Chairman of the Board

•

Recommends to the Chairman of the Board items for consideration to be included in the Board meeting agendas and schedules

•

Serves as liaison between the Chairman of the Board and the independent directors

•

Consults and communicates with major stockholders upon request

In evaluating candidates for Lead Independent Director, the independent directors consider several factors, including each candidate’s corporate governance experience, board service and tenure, leadership roles, and the ability to meet the necessary time commitment. For an incumbent Lead Independent Director, the independent directors also consider the results of the annual Lead Independent Director assessment as described above.

Annual Meeting Attendance

All directors are expected to attend the Annual Meeting of Stockholders, unless attendance is prevented by an emergency. All of our Board members who were directors as of the date of our 2021 Annual Meeting attended the meeting.

Board Meetings and Committees

Board Meetings

Our policy is that all directors must be able to devote the required time to carry out director responsibilities and should attend all meetings of the Board and of committees on which they serve.

Members of the Board are expected to attend Board meetings in person, unless the meeting is held by teleconference. During 2021, there were nine meetings of the Board and collectively 14 committee meetings. The incumbent directors attended at least 75%, and on average attended 100%, of all Board and applicable committee meetings in 2021 (held during the period each director served).

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	AUDIT COMMITTEE
	Current Members:			Primary Responsibilities:
	Gregory E. Aliff, Chair Terry P. Bayer Richard P. Magnuson Patricia K. Wagner Committee Meetings Held in 2021: 4			• Represents and assists the Board in oversight of the quality and integrity of the Company’s financial statements; the Company’s compliance with legal, environmental, regulatory, and reporting requirements; the qualifications, performance, and independence of the Company’s Independent Registered Public Accounting Firm; the Company’s internal audit function; cybersecurity risk; and third party supplier risk • Responsible for the appointment, retention, compensation, and oversight of the Independent Registered Public Accounting Firm • Reviews with management each Form 10-K and 10-Q report required to be submitted to the SEC • Reviews annually the quality of reporting processes and internal controls, internal auditor reports and opinions, and any recommendations the Independent Registered Public Accounting Firm may have for improving or changing the Company’s internal controls • Oversees and reviews with management risks related to the Company’s financial reporting and internal controls • Oversees the Company’s compliance program with respect to legal and regulatory requirements, including the Company’s codes of conduct, and oversees the Company’s policies and procedures for monitoring compliance • Oversees the Company’s cybersecurity program, including management’s response to emerging risks and compliance with all federal and state cybersecurity standards and privacy laws • Oversees the Company’s program to identify, manage, and mitigate third party supplier risk and reviews with management compliance with the Supplier Code of Conduct and performance of the Supplier Diversity Program

All members of the Audit Committee are independent as defined in the New York Stock Exchange, and meet additional independence requirements for audit committee members applicable under SEC rules and the New York Stock Exchange listing standards.

The Board has determined that each Audit Committee member has considerable knowledge in financial and auditing matters to serve on the Audit Committee. Gregory E. Aliff, Terry P. Bayer, and Patricia K. Wagner meet the New York Stock Exchange listing standards of financial sophistication and are “audit committee financial experts” under SEC rules.

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	ORGANIZATION AND COMPENSATION COMMITTEE
	Current Members:			Primary Responsibilities
	Thomas M. Krummel, M.D., Chair Terry P. Bayer Scott L. Morris Lester A. Snow Committee Meetings Held in 2021: 3			• Oversees the Company’s officer compensation structure, policies and programs; assesses whether the Company’s compensation structure establishes appropriate incentives for officers; and assesses the results of the Company’s most recent advisory vote on executive compensation • Oversees the evaluation and recommendations of the compensation of the CEO to the independent directors and of the executive officers to the Board of Directors • Reviews the organizational structure for the Company’s senior management • Oversees the strategies and policies related to human capital management, including matters such as diversity and inclusion, workplace environment, culture, talent development and retention, and succession planning • Oversees a periodic assessment of the risk related to the Company’s compensation policies and practices applicable to officers and employees • Reviews and discusses with our management the Compensation Discussion and Analysis disclosure required to be included in the proxy statement for the Annual Meeting of Stockholders to be filed with the SEC and, based on such review and discussion, determines whether to recommend to the Board that the Compensation Discussion and Analysis disclosure be included in such filing • Oversees preparation of the Compensation Committee report required by SEC rules to be included in the proxy statement for the annual meeting of stockholders All members are independent as defined in the listing standards of the New York Stock Exchange, and meet additional independence requirements for compensation committee members applicable under SEC rules and the New York Stock Exchange listing standards.

Compensation Consultant

The Organization and Compensation Committee retained Veritas Executive Compensation Consultants (Veritas) to advise it on marketplace trends in executive compensation, management proposals for the 2022 compensation program, and executive officer compensation decisions. Additionally, Veritas generally evaluated our equity compensation programs. Veritas has been retained for advice on 2023 executive compensation.

Veritas was directly accountable to the Organization and Compensation Committee. To maintain the independence of their advice, Veritas did not provide any services to us other than those described above and advice to the Nominating/Corporate Governance Committee on marketplace trends in director compensation for the 2022 compensation program. In addition, the Organization and Compensation Committee conducted a conflict of interest assessment, considering the six factors below with respect to Veritas and confirmed no conflict-of-interest existed:

•

The provision of other services to the Group by Veritas

•

The amount of fees received from the Group by Veritas, as a percentage of total revenue of Veritas

•

The policies and procedures of Veritas that are designed to prevent conflicts of interest

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	FINANCE AND CAPITAL INVESTMENT COMMITTEE
	Current Members:			Primary Responsibilities:
	Terry P. Bayer, Chair Richard P. Magnuson Carol M. Pottenger Lester A. Snow Patricia K. Wagner Committee Meetings Held in 2021: 2			• Assists the Board of Directors in fulfilling its oversight responsibilities with respect to the monitoring and oversight of our financial resources, including its capital investment management and rate recovery, and resolution planning and processes • Assists the Board in reviewing our financial policies, strategies, and capital structure • Reviews and makes recommendations to the Board for approval, where authority to do so has been delegated by the Board, regarding: • long-term financial objectives and policies • financing requirements and financing plans • the annual dividend plan • oversight of the annual operating budgets • oversight of the annual capital investment plans, including periodic updates on the progress of the annual construction and capital investment programs • reports received from the employee benefit finance committee • other finance matters as appropriate In addition, the Committee will discuss with management the policies and procedures concerning the major risk exposures, including exposures to infrastructure failure risk and credit risk, and the steps management has taken and/or proposes to take to monitor, mitigate, and control such exposures within the capital investment process. All members are independent as defined in the listing standards of the New York Stock Exchange.

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	NOMINATING/CORPORATE GOVERNANCE COMMITTEE
	Current Members:			Primary Responsibilities:
	Richard P. Magnuson, Chair Shelly M. Esque Thomas M. Krummel, M.D. Yvonne A. Maldonado, M.D. Carol M. Pottenger Committee Meetings Held in 2021: 2			• Oversees director succession planning and actively seeks diverse individuals qualified to become Board members • Evaluates the composition of the board annually to assess whether the skills, experience, characteristics, and other criteria established by the Board are currently represented on the Board as a whole and in individual directors, and to assess the criteria that may be needed in the future • Evaluates the performance of the individual directors and full Board annually • Oversees risks related to matters of corporate governance, including director independence and Board performance • Recommends to the Board the size, structure, composition, and functioning of the Board and its committees • Reviews the compensation of directors for service on the Board and its committees, and recommends changes to the Board as appropriate • Reviews the Corporate Governance Guidelines annually and recommends changes to the Board • Oversees the Company’s Code of Business Conduct and Ethics for Directors and compliance with the code • Provides oversight of and reviews the Company’s strategy, policies, practices, risks, and disclosures with respect to ESG matters, and makes recommendations to management as appropriate • Assists management in overseeing internal and external communications with employees, investors, and other stakeholders regarding the Company’s position on or approach to ESG matters All members are independent as defined in the listing standards of the New York Stock Exchange.

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	ENTERPRISE RISK MANAGEMENT, SAFETY, AND SECURITY COMMITTEE
	Current Members:			Primary Responsibilities
	Lester A. Snow, Chair Carol M. Pottenger, Vice Chair Gregory E. Aliff Shelly M. Esque Scott L. Morris Yvonne A. Maldonado, M.D. Committee Meetings Held in 2021: 3			• Assists the Board in the oversight of our enterprise risk management, safety, and security programs, including those related to physical safety and security • Discusses with management our principal risks and the effectiveness of the processes used by management to both identify and analyze major risks, as well as the effectiveness of the programs to manage and mitigate risks • Reviews with management our risk assessments, the steps management has taken, or would consider taking, to minimize such risks or exposures and safeguard assets, and our underlying policies with respect to risk assessment, risk management, and asset protection • Discusses with management current and emerging applicable matters that may affect the business, operations, performance, or public image of the organization, or are otherwise pertinent to us and our stakeholders • Reviews our Emergency Preparedness program, including emergency response and coordination with authorities • Reviews our physical safety and security programs to ensure preventive detection and remedial controls and processes are in place • Oversees our other compliance programs for enterprise risk management, safety, and security, as well as our policies and procedures for monitoring compliance • Makes recommendations to the Board and to our senior management with respect to any of the above matters as the Committee deems necessary or appropriate All members are independent as defined in the listing standards of the New York Stock Exchange.

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Board Role in Risk Oversight

Inherent in the Board’s responsibilities is an understanding of, and oversight over, the various risks facing the Company. The Board does not view risk in isolation, but includes risk as part of its regular consideration of business decisions and business strategy. To assist the Board in its risk oversight, the Board reviews the Company’s risks and the responsibilities of management and the Board committees regularly. The committees report to the entire Board on a regular basis and have overlapping directors, invite Chairs of other committees and other directors to attend meetings, and hold joint meetings as necessary.

	Board of Directors
	The Company believes that its Board leadership structure supports the risk oversight function of the Board. As effective risk oversight is an important priority of the Board, the Board has allocated responsibilities for risk oversight among the full Board and its committees.

Audit

Organization and Compensation

Finance and Capital Investment

Oversees risks related to financial reporting and internal controls, cybersecurity, and third-party suppliers.

Oversees risks related to human capital management and oversees periodic assessments of risks relating to our compensation plans and programs to see that these plans and programs do not encourage management to take unreasonable risks relating to our business.

Oversees risks within the capital investment programs including infrastructure failures and credit risk.

	Nominating/Corporate Governance						Enterprise Risk Management, Safety, and Security
	Oversees risks related to matters of corporate governance, including director independence and Board performance, as well as risks related to environmental, social responsibility, and sustainability matters.						Oversees management’s development and execution of the Group’s enterprise risk management, safety, and security programs, including those related to physical safety and security and advises on the committee oversight function for key risks.

Executive Management

	Management						Strategy Operating
	The Company’s Management Committee (MC), chaired by the President & CEO, is comprised of Group and subsidiary executives, and meets monthly. Among other functions, the MC identifies and prioritizes key risks and recommends the implementation of appropriate mitigation measures as needed. The MC reports to the Audit Committee and Enterprise Risk Management, Safety, and Security Committee no less frequently than annually. Further review or reporting on risks is conducted as needed or as requested by the Board or committee.						The Company’s Management Committee (SOC), chaired by the President & CEO, is comprised of senior officers and NEOs, and meets twice per month. Among other functions, the SOC assesses evolving market conditions and develops a long-term strategy to mitigate emerging risks and maximize future opportunities. Priorities for the SOC include, but are not limited to, workforce transformation (including succession planning, employee development, and recruitment), business development, political climate, operating model, affordability, resiliency, climate change, and sustainability, with an emphasis on water resource planning.

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The following is our Enterprise Risk Management and Risk Responsibility Matrix, which identifies our major corporate risks, board oversight, and lead officer and department currently responsible for risk mitigation. It also demonstrates our commitment to transparency and accountability for management of the key risks facing the company and effective risk management:

Board Oversight	Tier 1 Risk(1)	Lead Officer
Full Board	Affordability and Access Risk	VP, Rates and Regulatory Affairs
	Political Risk	VP, Customer Service & Chief Citizenship Officer
	Regulatory Risk	VP, Corporate Development
	Water Supply Risk	VP, Customer Service & Chief Citizenship Officer
	Climate Change Risk	VP, Customer Service & Chief Citizenship Officer
Enterprise Risk Management, Safety, and Security Committee (ESSC)(2)	Environmental Contamination Risk	VP, Engineering & Chief Water Quality & Environmental Compliance Officer
	Safety and Security Risk	VP, IT & Chief Risk Officer
	Natural or Human-Caused Disaster Risk	VP, IT & Chief Risk Officer and VP, Operations
	Emergency Preparedness & Business Continuity Risk	VP, IT & Chief Risk Officer
	Water Quality Risk	VP, Engineering & Chief Water Quality & Environmental Compliance Officer
Finance Committee	Infrastructure and Asset Failure Risk	VP, Engineering & Chief Water Quality & Environmental Compliance Officer
Organization/Compensation Committee	Talent Risk, including Diversity, Equality, and Inclusion	VP, Chief Human Resource Officer
Audit Committee	Cybersecurity Risk	VP, IT & Chief Risk Officer
Audit Committee	Third-Party Supplier Dependency Risk	VP, CFO & Treasurer

(1)

Each Tier 1 Risk topic is also led by designated officers of the Company across departments.

(2)

The Enterprise Risk Management, Safety, and Security Committee is responsible for the oversight of the emergency response management process, including emergency response management updates and annual reporting to the Board regarding compliance.

Board Oversight of Cybersecurity Risk

The Board and Audit Committee are responsible for overseeing information technology risks. The Board recognizes the importance of maintaining the trust and confidence of our customers, employees, and stockholders and the need to protect personal and proprietary data. To more effectively prevent, detect, and respond to information security threats, our Vice President of Information Technology & Chief Risk Officer, who reports directly to our President & CEO, leads a team who is responsible for managing our enterprise-wide information security strategy, policy, standards, architecture, and processes. The Board and Audit Committee receive regular reports from our Vice President of Information Technology & Chief Risk Officer no less than quarterly on information technology risks, including cybersecurity and data security risks, as well as the status of projects to strengthen the Company’s information security systems, assessments of the Company’s security program, and the emerging threat landscape.

Management of Cybersecurity Risk

We align with multiple standards and regulations for cybersecurity and data privacy, including the following:

•

National Institute of Standards and Technology (NIST) Cybersecurity Framework

•

The Sarbanes-Oxley Act

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•

NIST 800-171 and Cybersecurity Maturity Model Certification

•

Payment Card Industry Data Security Standard

•

California Consumer Privacy Act (CCPA)

•

Health Insurance Portability and Accountability Act

•

Defense Federal Acquisition Regulations Supplement (DFARS)

We regularly assess our adherence to these standards and maintain programs that meet these requirements. The Group has not experienced any material cybersecurity breaches in the last three years.

Our Information Technology (IT) team continues to support a variety of best practices that align with recognized frameworks and reflect our advanced approach to cybersecurity:

•

Regular testing: External audits annually test our controls and assess opportunities to mitigate deficiencies, and we continue to witness measurable improvements in testing by correcting any weakness detected in past assessments. A third party conducts an annual network penetration test on our corporate and supervisory control and data acquisition (SCADA) networks. In addition to reviewing known software vulnerabilities, the assessment includes tests to breach the network through various pathways, analyzes our security levels, and evaluates our Incident Response Plan. Our IT team also conducts a rehearsal for our Incident Response Plan multiple times per year and leverages support from the DHS, the FBI, and our contractors that offer critical defensive solutions.

•

Monitoring for risks: We engage a third party to manage our Security Operations Center (SOC) and monitor network traffic 24/7. Our SOC identifies and responds to cybersecurity issues in real time by assessing the level of threats and determining appropriate actions.

•

Security controls: We incorporate physical- and software-based preventive, detective, and corrective security controls, and our Security Incident Event Management tool monitors all security logs, includes detective controls, and identifies irregular activities. This software also records how often vulnerabilities are scanned and patched.

•

Defensive technology: Multiple technologies help protect our system through defensive solutions. Our intrusion prevention system is designed to block unwanted traffic in the network, our next-generation antivirus program provides additional defense, and our end point protection systemCrowdstrike targets suspicious activity on endpoint devices. We also leverage a data loss prevention security tool that inspects outgoing traffic and is designed to block sensitive data from being exposed.

•

Regular improvements: We regularly enhance our systems and integrate new information to upgrade our systems. We review and approve software and hardware acquisitions for security, and we have incorporated advanced controllers within our SCADA system. To support ongoing improvement, we engage the FBI, DHS, and Fusion Center for incident response support and collaborate to share critical information.

Our leaders also share knowledge to protect our infrastructure and learn from recent developments. Our Chief Risk Officer (CRO) serves on the Board of Directors for the San Francisco Bay Area Chapter of InfraGard, which is a collaboration between the FBI and members of the private sector that promotes the protection of U.S. critical infrastructure and enables the exchange of important information. Our Director of IT Security and Chief Information Security Officer (CISO) also actively participates on the Safety and Security Committee of the NAWC to collaborate with members of our industry and learn best practices.

Our employees represent the foundation of cybersecurity protection and are a key line of defense, and we strengthen their ability to target risks by proactively training active employees and contractors each year. We update our online security awareness training annually to review key policies and practices for security.

To further engage our workforce and inform employees of applicable security topics, we provide a monthly internal cybersecurity newsletter. Our monthly campaign on mock phishing emails reminds employees to refrain from clicking on fraudulent emails disguised as safe content. First-time offenders undergo additional training, repeat offenders must meet with their supervisors and the IT Security team, and additional offenses result in a negative performance log. Due to our preventive controls and training, we have observed year-over-year reductions in employees clicking on test phishing emails.

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Other Governance Best Practices

We adopted other practices we believe reflect our commitment to good corporate governance including:

Policies Prohibiting Hedging and Pledging

In accordance with our Insider Trading Policy, our directors and executives are prohibited from:

•

Hedging their ownership of Group stock, including trading in options, puts, calls, or other derivative instruments related to Group stock or debt; and

•

Pledging their ownership of Group stock.

Executive Compensation Recovery (“Clawback”) Policy

Our Board has adopted an executive compensation recovery, or “clawback,” policy requiring the reimbursement of excess incentive-based compensation provided to the executives in the event of certain restatements of our financial statements. A more detailed description of the Executive Compensation Recovery Policy appears in the “Compensation Discussion and Analysis” section of this Proxy Statement.

Codes of Business Conduct

Board members are expected to adhere to the Code of Business Conduct and Ethics for Members of the Board of Directors, which outlines expectations for behavior and promotes a culture of honesty. Our Business Code of Conduct applies to all officers and employees of Group, highlights areas of ethical risk, provides guidance in recognizing and handling ethical issues, and describes established mechanisms for reporting unethical conduct. We require employees to receive annual ethics training as part of the Business Code of Conduct. Our Business Code of Conduct is available on our website at http:/www.calwatergroup.com.

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Director Compensation

The Nominating/Corporate Governance Committee is responsible for non-employee director compensation and makes recommendations to the Board. For 2021, the Nominating/Corporate Governance Committee retained the services of Veritas for determining non-employee director compensation with Veritas’ recommendations based on competitive positioning, both in terms of individual compensation components and total compensation.

For fiscal year ended 2021, our non-employee directors received compensation comprised of both annual cash retainers for Board and committee chair services (with additional retainers for the Chairman of the Board and the Lead Director) and an annual equity award along with meeting fees for their service. In response to the coronavirus pandemic and its devastating effects on the communities we serve, all directors elected to take a temporary voluntary cash compensation (cash retainer and meeting attendance fees) reduction of 10% for fiscal year 2021, contributing the value of their reduction to the Cal Water Hardship Fund to assist our customers. In lieu of the value of their reduced cash compensation, a special equity grant with risk of forfeiture was issued to each director on January 4, 2021 in the form of a restricted stock award, vesting on the one-year anniversary of the grant.

Board Retainers:
Annual Base Retainer – All Directors	$	65,500
Chairman of the Board Retainer	$	60,000
Lead Director Retainer	$	22,000
Committee Chair Retainers:
Audit Committee Chair Retainer	$	18,000
Organization and Compensation Committee Chair Retainer	$	13,500
Nominating/Corporate Governance Committee Chair Retainer	$	12,500
Finance and Risk Management Committee Chair Retainer	$	10,000
Enterprise Risk Management, Safety, and Security Committee Chair Retainer	$	11,000
Enterprise Risk Management, Safety, and Security Committee Vice Chair Retainer	$	5,500
Board/Committee Meeting Attendance Fees:
Chairman of the Board – Board Attendance Fee	$	4,600
All Other Directors – Board Attendance Fee	$	2,300
Chairman of the Board – Committee Attendance Fee	$	1,800
All Other Directors – Committee Attendance Fees	$	1,800
Equity:
Annual RSA Equity Grants(1)	$	87,500
Special Fiscal Year 2021 Equity Grant(1)		Varies

(1)

In 2021, non-employee directors received special one-time grants of restricted stock in lieu of the value of such director’s reduced cash compensation and annual grants of restricted stock valued at $87,500 as the Board retainer. The restricted stock grants were made on January 4, 2021 and March 2, 2021, respectively, and were fully vested on the first anniversary of the grant date.

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Directors may elect to defer cash compensation payable to them under the Group’s deferred compensation plan in the same manner as applicable to the Group’s executives as described below.

Name (a)	Fees Earned or Paid in Cash ($) (b)			Stock Awards(2)(3) ($) (c)			Total ($) (h)
Peter C. Nelson, Chairman(1)		$	180,910		$	101,907		$	282,817
Richard P. Magnuson, Lead Director			132,530			96,402			228,932
Gregory E. Aliff			117,320			95,119			212,439
Terry P. Bayer			110,300			94,157			204,457
Shelly M. Esque			91,400			92,233			183,633
Thomas M. Krummel, M.D.			108,600			93,943			202,543
Yvonne A. Maldonado, M.D.			64,672			58,891			123,563
Scott L. Morris			93,020			92,393			185,413
Carol M. Pottenger			99,590			93,141			192,731
Lester A. Snow			110,840			94,585			205,425
Patricia K. Wagner			95,000			92,233			187,233

(1)

Mr. Nelson’s retainer includes the Chairman of the Board retainer for his role as Chairman of the Board.

(2)

Amounts reflect the full grant date fair value of each RSA granted in 2021 to the non-employee directors, calculated in accordance with FASB ASC Topic 718, disregarding estimates for forfeitures. On January 4, 2021, in lieu of the value of reduced cash compensation, non-employee directors received special one-time grants of restricted stock valued at $19,402 for Mr. Nelson, $13,897 for Mr. Magnuson, $12,614 for Mr. Aliff, $11,652 for Mr. Bayer, $9,728 for Ms. Esque, $11,438 for Dr. Krummel, $9,888 for Mr. Morris, $10,637 for Ms. Pottenger, $12,080 for Mr. Snow and $9,728 for Mr. Wagner. In addition, On March 2, 2021, non-employee directors received annual grants of restricted stock valued at $87,500 as the Board retainer. Assumptions used in the calculation of these amounts are included in footnote 12 of Group’s annual report on Form 10-K, filed with the Securities and Exchange Commission on February 24, 2022.

(3)

At the end of 2021, the aggregate number of RSAs held by each current non-employee director was as follows: Peter C. Nelson, 5,261; Gregory E. Aliff, 12,680; Terry P. Bayer, 14,607; Shelly M. Esque, 6,033; Thomas M. Krummel, M.D., 26,663; Richard P. Magnuson, 15,169; Yvonne A. Maldonado, M.D. 1,021; Scott L. Morris, 3,598; Carol M. Pottenger, 7,569; Lester A. Snow, 17,305; Patricia K. Wagner, 3,595.

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Compensation

In this section, we describe our executive compensation philosophy and program that supports our strategic objectives and serves the long-term interests of our stockholders. We also discuss how our President & Chief Executive Officer, Chief Financial Officer, and other Named Executive Officers (collectively, our NEOs) were compensated in 2021 and describe how their compensation fits within our executive compensation philosophy. For fiscal 2021, our NEOs were:

	Name			Title
	Martin A. Kropelnicki			President & CEO
	Thomas F. Smegal III			Vice President, Chief Financial Officer
	Paul G. Townsley			Vice President, Corporate Development
	Robert J. Kuta			Vice President, Engineering and Chief Water Quality and Environmental Compliance Officer
	Lynne P. McGhee			Vice President, General Counsel

This section is divided into the below six sections:

Table of Contents	Page
This Compensation Discussion and Analysis is organized as follows:
1 2021 Compensation Overview		47
2 NEO Compensation Components and Pay Mix		48
3 Executive Compensation Governance and Process		51
4 2021 Performance Goals and Performance		54
5 Other Compensation Programs		67
6 Executive Compensation Policies and Practices		68

1 2021 Compensation Overview

Our executive compensation programs are designed to attract, motivate, and retain key officers with the ultimate goal of generating strong operating results and creating long-term alignment with our stockholders and customers. We reward for excellent job performance, overall leadership, long-term results, and provide for fair, reasonable, and competitive total compensation.

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Our executive compensation programs are built upon the following framework:

•

Pay-for-performance by aligning officer compensation to pre-established, quantifiable performance goals

•

Use performance metrics that are understandable and are tied to key performance indicators; all of our officers have the ability to make an impact

•

Provide competitive pay to attract and retain highly qualified officers

•

Align management interests with the long-term interests of our customers and stockholders

•

Establish performance goals that are aligned with our organizational strategy

•

Maintain a one-team approach, meaning all eligible officers and department heads share the same performance targets and compensation plan

Our officer team’s 2021 performance demonstrates our commitment to delivering value to our stockholders and customers, with strong performance on both financial and non-financial measures. For 2021, our performance resulted in 134% achievement of target for the short-term incentive compensation plan and 159% achievement of target and payout for the long-term performance-based equity grant for performance period 2019-2021.

2 NEO Compensation Components and Pay Mix

Our officers’ total direct compensation is heavily weighted towards performance and appropriately balances officer focus on our short- and long-term priorities with annual and long-term rewards. Consistent with our compensation philosophy, our total compensation program was developed by taking into account competitive market data as well as a variety of additional factors, including individual experience, tenure, performance and leadership, Group performance, and internal equity among the officers.

2021 Total Direct Compensation

	Martin Kropelnicki			Thomas Smegal			Paul Townsley			Robert Kuta			Lynne McGhee
Base Salary		$	901,872		$	429,032		$	378,245		$	324,508		$	311,531
Short-Term Incentive			1,206,000			172,136			151,795			130,248			125,022
Long-Term Incentive			988,683			198,496			192,777			186,897			185,400
Total Direct Compensation(1)			3,096,555			799,664			722,817			641,745			621,953

(1)

Represents base salary, earned annual performance-based short-term incentive compensation, grant date fair value of long-term performance-based restricted stock units, and grant date fair value of time-based restricted stock awards.

Total Compensation Philosophy for Executives

Providing compensation that attracts, retains, and motivates talented officers is our committed goal. Our compensation programs reward excellent job performance, identify exceptional leadership, and represent fair, reasonable, and competitive total compensation that aligns officers’ interests with the long-term interests of our stockholders and customers.

The Committee believes a balance of fixed and variable compensation components with short-term and long-term compensation elements, maintains a strong link between the NEOs’ compensation and the overall Group’s performance while promoting the interests of both customers and stockholders. The Committee annually re-evaluates the mix of fixed and variable compensation, including the proportions of incentive compensation awarded as short-term cash-based and long-term equity-based awards and stockholder feedback. Additionally, the Committee continues to monitor our program on an annual basis to ensure the structure will not incentivize excessive risk-taking.

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In addition, our executive compensation program considers the following factors:

•

The overall financial and operating performance of our company

•

Changes in market conditions, cost of living differences, and market trends

•

Each officer’s performance and contributions to the achievement of short-term and long-term financial goals and operational milestones

•

Each NEO’s job responsibilities, expertise, historical compensation, and years and level of experience

•

Our overall succession planning and the importance of retaining each NEO and each NEO’s potential to assume greater responsibilities in the future

•

Peer group benchmarking data and compensation analyses

We believe our executive compensation program is achieving the intended results. Our compensation programs continue to be competitive in the industry and have resulted in the attraction and retention of talented officers who contribute to the long-term success of the Group. Our compensation programs create a strong linkage between pay and performance through long-term equity and annual performance-based short-term incentive compensation without encouraging imprudent risk taking by our officers.

Elements of Compensation

The material elements of our officer compensation program for 2021 included:

•

Base Salary

•

Annual Short-Term Performance-Based Incentive Compensation

•

Performance and Time-Based Long-Term Equity Compensation

•

Basic and Supplemental Pension Plan Benefits

•

Employee funded Deferred Compensation Plan Benefits

•

Limited Perquisites

In determining compensation, the Committee is mindful that as a holding company for a California regulated utility, the Group’s financial performance is substantially dependent upon CPUC regulation plus other factors, which to a large extent are beyond the control of officers. Therefore, the Committee’s decisions regarding overall compensation are determined largely by evaluation of factors that are within the officers’ control and its comparisons with companies in its peer group. As discussed below under “2021 Performance Goals and Performance”, the metrics used to determine our officers’ annual short-term performance-based incentive compensation and the vesting of long-term performance-based equity compensation awards are appropriate metrics that align officer performance in a manner beneficial to both stockholders and customers, and do not encourage imprudent risk-taking.

Base Salary

The only guaranteed portion of executive total compensation is fixed base salaries commensurate with the performance of primary roles and responsibilities. The Committee reviews officer base salaries annually and determines whether or not to recommend adjustments to salaries based on performance and changing market conditions.

The Committee has and continues to target fixed base salaries for each officer that are appropriate for the performance, skills, capabilities, tenure, and individual contributions in his/her position. Consistent with established practice, the 2021 base salaries for our officers were compared to the base salaries for similar positions within the competitive data and California peers. Similarly, the total target cash compensation for our officers (taking into account annual short-term incentive compensation targets) was compared to the competitive market data for target total cash compensation.

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Each officer’s 2021 base salary was within the competitive range (defined as plus or minus 20% from the median compensation level, based upon available survey data) of target total cash compensation.

In response to the pandemic and its devastating effects on the communities we serve, all executives elected to take a temporary voluntary pay reduction (averaging 10%) for fiscal year 2021. Executives, consistent with the Board of Directors, contributed the value of their pay reduction to the Cal Water Hardship Fund to assist our customers. In lieu of the value of their salary reduction, a special equity grant with risk of forfeiture was granted to each executive on January 4, 2021 in the form of a restricted stock award, vesting on the one-year anniversary of the date of grant.

2021 Salary Reduction
Name	2020 Base Salary			2021 Base Salary Before Temporary Voluntary Reduction			Percent Increase		2021 Base Salary After Temporary Voluntary Reduction			Percent Decrease
Martin A. Kropelnicki		$	1,021,545		$	1,021,545		0.0		$	900,000		(12.0)
Thomas F. Smegal III			475,800			475,800		0.0			428,220		(10.0)
Paul G. Townsley			419,500			419,500		0.0			377,550		(10.0)
Robert J. Kuta			360,000			360,000		0.0			324,000		(10.0)
Lynne P. McGhee			345,500			345,500		0.0			310,950		(10.0)

For 2022, base salaries for NEOs were increased to reflect two years of cost-of-living increases and, in some cases, performance. This is intended to compensate NEOs for job performance and overall leadership while maintaining salaries within the “competitive range” of the market data. This market data is updated annually by our independent compensation consultant retained by the board.

2022 Salary Increase
Name	2021 Base Salary Before Temporary Voluntary Reduction			2022 Base Salary			Percent Increase From 2020/2021 Base Salary
Martin A. Kropelnicki		$	1,021,545		$	1,050,000		2.8
Thomas F. Smegal III			475,800			504,400		6.0
Paul G. Townsley			419,500			450,000		7.3
Robert J. Kuta			360,000			389,000		8.1
Lynne P. McGhee			345,500			366,300		6.0

Short-Term Performance Incentive Award Opportunity

For 2021, the short-term incentives (STI) target opportunity was unchanged from 2020.

President & CEO

Target STI Payout: 100% of base salary

Actual STI Payout Range: 0% to 200% of target,based on performance

All Other Officers

Target STI Payout: 30% of base salary

Actual STI Payout Range: 0% to 200% of target, based on performance

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Performance and Time-Based Equity Compensation

For 2021, the Organization & Compensation Committee did not change the target total value for the long-term equity (LTI) compensation awards from 2020.

President & CEO

Target LTI Total Value: $920,000

•

Performance-Based RSUs: 60%

•

Time-Based RSAs: 40%

Group’s Vice Presidents

Target LTI Total Value: $160,000

•

Performance-Based RSUs: 53%

•

Time-Based RSAs: 47%

All Other Executives

Target LTI Total Value: $95,000

•

Performance-Based RSUs: 53%

•

Time-Based RSAs: 47%

Performance-based RSUs have a three-year performance period, vesting 0% to 200% based on performance of each metric and time-based RSAs vest over three years.

3 Executive Compensation Governance and Process

Role of the Organization and Compensation Committee

We are committed to the highest standards of compensation governance. Comprised entirely of independent outside directors, the Organization and Compensation Committee (Committee) is responsible for overseeing our compensation programs for officers and officer succession.

The Committee recommends to the Board compensation levels and incentive performance objectives for officers for the 12-month period beginning January 1 of each year. These objectives align with stockholder and customer interests and support our long-term growth and health of the Company. To assist the Committee, our President & CEO provides an assessment of each officer’s performance and contribution towards the key corporate goals. Our President & CEO’s recommendations regarding direct compensation adjustments are provided to the Committee for each of our officers other than himself based on the competitive data and the other factors described below under “Total Compensation Factors.”

The Committee starts its planning and review process in February of each preceding year and generally concludes its process in November. After year-end results are final, the Committee reviews the achieved results for the prior year, certifies the achievement of each goal, approves payment of incentive compensation as certified, and approves the incentive compensation targets for the current year.

The following summary outlines the key features of our officer compensation program:

	What We Do			What We Don’t Do
	We pay for performance with compensation in the form of annual short-term performance-based incentives, as well as award more than half of long-term equity incentive compensation in the form of restricted stock units (RSUs) subject to performance-based vesting criteria over a three-year period. We retain an independent compensation consultant who reports to the Organization and Compensation Committee. We hold an annual “say-on-pay” advisory vote. We require stock ownership with minimum holding requirements for all directors and officers to promote a long-term perspective in managing the Group and to help align the interests of our stockholders, directors, and officers. We cap individual payouts for short-term performance-based incentive and long-term equity incentive compensation plans. We have an officer compensation recovery (“clawback”) policy requiring the reimbursement of excess incentive-based compensation, provided to the Group’s officers in the event of certain restatements of the Group’s financial statements.			No excessive perquisites; the Group provides officers with only limited perquisites consisting of a company vehicle with related excess liability insurance. No tax gross-ups on perquisites or other personal benefits. No employment agreements; other than participation in the Executive Severance Plan, none of our officers are party to individual employment or severance agreements. No single-trigger change-in-control benefits; the Group’s Executive Severance Plan provides for change-in-control severance benefits upon a termination of employment following a change-in-control; the Group’s equity incentive plan does not require single-trigger vesting acceleration upon a change-in-control. No hedging and pledging of Group stock; the Group’s directors and officers are prohibited from hedging their ownership of Group stock, including trading in options, puts, calls, or other derivative instruments related to Group stock or debt, in accordance with the anti-hedging prohibition in our insider trading policy; directors and officers are also prohibited from pledging their ownership of Group stock in accordance with an anti-pledging provision in our insider trading policy.

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Role of the Independent Executive Compensation Consultant and Total Compensation Factors

Each year the Committee reviews, assesses, and recommends to the full Board all compensation for our officers after determining that the compensation for these individuals is competitive relative to companies of comparable size, complexity, location, and business nature (see below for additional discussion of this comparison).

Role of the Independent Executive Compensation Consultant

With respect to 2021 compensation decisions, the Committee engaged Veritas Executive Compensation Consultants (Veritas) as its independent executive compensation consultant.

Under the terms of its engagement, Veritas reports directly to the Committee; the Committee has sole authority to retain, terminate, and approve the fees paid to Veritas; and Veritas may not be engaged to provide any other services to us without the approval of the Committee. Other than its engagement by the Committee, Veritas does not perform any other services for the Group. The Committee believes having an independent evaluation of compensation is a beneficial tool for the Committee, the Group, and stockholders. The Committee retained Veritas for several purposes, including:

•

Constructing and reviewing competitive compensation comparisons from readily available published survey and public filings data

•

Performing a competitive assessment of the compensation programs and best practices for directors and officers

•

Reviewing our compensation plans, including base salary, short-term incentives, and long-term incentives, relative to the plans of our proxy peer group

The Committee annually assesses Veritas in light of various factors, including performance and those factors required by SEC rules and NYSE Listed Company Rules regarding compensation consultant independence. The Committee has affirmatively concluded that Veritas is independent from California Water Service Group and has no conflicts of interest relating to its engagement by the Committee.

Total Compensation Factors

The Committee reviewed a number of compensation recommendations, including those pertaining to the officers that were based on the competitive assessments provided by and through consultation with Veritas. The Committee’s recommendations to the Board were made, however, entirely by the Committee in its sole discretion.

In order to determine competitive compensation practices for 2021, the Committee relied, in part, on published survey compensation data, as well as proxy data for individual companies, compiled by Veritas. The individual companies are referred to in this proxy statement as the “Peer Group.” In partnership with the independent consultant, a robust process has been established to appropriately assess the relevance of different companies in the context of making competitive compensation comparisons. As with prior years, an established process was used to assess the proxy peer group composition and to establish the fiscal 2021 peers using the following factors:

	Regulated Utilities			Companies that are generally highly regulated public gas, water, or multi-utility-based organizations
	Similar Business Models			Companies that operate in similar arenas, requiring similar skills and experiences from their executive talent, and being subject to similar market forces
	Size (Revenue Within 1/2x-2x Range)			Companies of a broadly relevant size as an indicator of complexity and scope for executive roles; companies that are of a reasonable size for making market comparisons
	Other Factors			Additionally, a portion of the Peer Group is subject to unique California statutes similar to the Group

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On November 17, 2021, the Committee approved the following proxy peer group:

	Allete, Inc.			Northwest Natural Gas Company
	American States Water Company			NorthWestern Corp.
	Avista Corporation			Otter Tail Corporation
	Black Hills Corp.			PNM Resources
	Chesapeake Utilities Corp.			San Jose Water Group
	Essential Utilities, Inc.			South Jersey Industries, Inc.
	MGE Energy			Unitil Corporation

To properly advise the committee, Veritas utilized data from this proxy peer group to compile the competitive pay information, comparing each officer’s compensation to market levels for his/her executive position.

After consideration of the competitive data, in making compensation recommendations for the 2021 fiscal year for the officers, the Committee’s general objective was to set total compensation within a “competitive range” for each officer’s position based on the competitive data. The Committee considers the “competitive range” to mean that compensation levels are within plus or minus 20% of the median compensation levels, as determined by reference to the competitive data. Given reliable proxy data is only available for the CEO and CFO, general industry survey data is referenced using the same approach for the officers in other roles.

Actual compensation decisions for the officers were influenced by a variety of additional factors, including considerations of each individual’s experience, tenure, performance and leadership, Group’s performance, regional cost-of-living adjustments, internal equity among the officers, and the need to retain and motivate strategic talent.

In 2021, all executives elected to take a temporary voluntary pay reduction (averaging 10%) for fiscal year 2021. Executives, consistent with the Board of Directors, contributed the value of their pay reduction to the Cal Water Hardship Fund to assist our customers. In lieu of the value of their salary reduction, a special equity grant with risk of forfeiture was granted to each executive on January 4, 2021 in the form of a restricted stock award, vesting on the one-year anniversary of the date of grant.

Stockholder Engagement and Say-on-Pay

Our Board and management value the views of our stockholders and believe that maintaining an active dialogue with them is important to our commitment to long-term stockholder value. For fiscal year 2021, we received 93% of the votes cast on the Say-on-Pay advisory vote taken at the 2021 Annual Meeting of Stockholders. In light of the strong support received at our last Say-on-Pay vote, we did not make any changes to the executive compensation program in response to the 2021 Say-on-Pay vote.

The Committee recognizes that best practices in executive compensation continue to evolve, and we strongly believe in soliciting feedback from stockholders to better understand their perspectives, to receive their input on our business strategy and execution, and to gather feedback regarding other matters of investor interest. Over the course of 2021, management engaged regularly with investors at conferences and other forums, and discussed several topics, including corporate strategy, executive compensation, and environmental, social, and governance issues.

Through stockholder feedback, we have observed the following:

•

Stockholders have shared favorable views of our executive leadership team, including each of the named executive officers, and the alignment between pay and performance.

•

Stockholders understand the drivers of the non-cash change in pension which can change significantly based on uncontrollable factors (such as the discount rate) represent a large non-cash portion of the reported total compensation for our CEO and did not see the reported amount as a risk factor that influenced their Say-on-Pay vote. Instead, stockholders tend to focus on changes in our CEO’s pay, excluding the actuarial change in pension value.

As illustrated in the table below, our Board has been responsive to stockholder feedback and over the past several years, we have made numerous changes to our governance and executive compensation programs, and our proxy statement based on feedback from our stockholders, as well as a review of market practices.

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	Recent Governance and Executive Compensation Changes
	Governance • Formed the Enterprise Risk Management, Safety, and Security Committee • Environmental, social responsibility, and sustainability items are now overseen by the Nominating/Corporate Governance Committee • Adopted four new policies: Environmental Sustainability; Diversity, Equality, and Inclusion; Political Engagement; and Human Rights • Published our first Environmental, Social, and Governance (ESG) report with disclosure aligned with Sustainability Accounting Standards Board (SASB) Water Utilities & Services Industry Standards, and referencing Global Reporting Initiate (GRI) standards • Included environmental leadership in the 2020 long-term incentive compensation program for the three-year performance period 2020—2022 and affordability and rate design in the 2021 long-term incentive compensation program for the three-year performance period 2021 — 2023			Compensation • Continued emphasis on allocating long-term incentive compensation to performance-based equity awards • Modified the performance criteria used for long-term and short-term incentive compensation programs • Revised the methodologies used to determine our Supplemental Executive Retirement Plan (SERP)’s actuarial assumptions and amended the plan, increasing the plan’s unreduced retirement age from 60 to 65 • Conducted an independent, third-party review of: • Our President and CEO’s compensation program • Our executive short-term and long-term incentive compensation programs • Our proxy peer group • Updated our peer group to reflect industry changes

4 2021 Performance Goals and Performance

Pay-for-Performance

Our executive compensation program is designed to link officer compensation to our overall short-term and long-term performance (as measured by key operational and financial objectives incorporated in both long-term (LTI) and short-term (STI) performance-based compensation programs) as outlined below.

•

We utilize a short-term performance-based compensation program consisting of an annual performance-based short-term incentive that supports our long-term growth objectives of the Group.

•

More than half of long-term equity incentive compensation is in the form of restricted stock units (RSUs) subject to performance-based vesting criteria. The Group’s President & CEO is awarded 60% of long-term equity incentive compensation in the form of RSUs, subject to performance-based vesting criteria, with the remaining 40% awarded in the form of time-based restricted stock awards (RSAs). The Group’s vice presidents are awarded 53% of long-term equity incentive compensation in the form of RSUs, subject to performance-based vesting criteria, with the remaining 47% awarded in the form of RSAs.

•

We use a three-year performance period for the long-term performance-based RSUs with vesting based upon achievement of annual performance targets related to customer affordability and rate design, shareholder value, and earnings per share.

2021 Corporate Goals, Objectives, and Achievements

Each year, our officers establish a number of corporate goals and objectives that promote the long-term growth and align the interests of stockholders, customers, and employees. The objectives are communicated internally and monitored quarterly. Changes in base salary for our President & CEO and other NEOs are generally based on progress against certain of these key corporate goals and individual officer performance.

Once the Committee assesses the business results for each long-term, goal as described below for 2021, the Committee then reviews and discusses the overall performance of each officer and the competitive data provided by the independent consultant retained by the Committee. Once reviewed and agreed upon, the Committee recommends to the Board the base salaries for our officers (including the President & CEO).

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	Group Operations: Achieve planned operating results as defined in the 2021 Corporate Goals and Objectives			• Achieved record net income • Continued enhancement of the Group’s safety organization and programs, making safety a top priority • Activated our Drought Response Taskforce, initiated Drought Response Plans, and mobilized to accelerate critical water supply projects • Signed an agreement to purchase a wastewater system serving 1,800 customers on the island of Kauai • Texas Water became the majority owner of BVRT, a Texas-based utility development company owning and operating four wastewater utilities, serving over 2,500 connections in the growing communities in between Austin and San Antonio • ESG and Emergency Risk Management accomplishments: • Updated Enterprise Risk Management Model • Continued enhancement of the Group’s cybersecurity program • Published first framework-aligned ESG Report • Adopted four new ESG-related policies • Established an ESG governance framework • Developed a climate change strategy • Completed our Climate Change Risk Assessment & Adaptation Framework • Conducted a robust ESG goal-setting process • Named one of “America’s Most Responsible Companies” by Newsweek magazine for 2022, ranking first among water utilities, 19th among energy and utility companies, and 180th overall among all companies nationwide • Increased spending with diverse vendors to 20.85% in California
	Financial: Achieve budgeted earnings per share of $1.96, earn authorized return on equity on invested capital of 9.20%, and company-funded capital expenditures of $295 million			• Achieved net income of $101.1 million and diluted earnings per share of $1.96 (each determined in accordance with GAAP) • Achieved the majority of our operational goals while keeping controllable costs within budget • Invested $293.2 million of capital in accordance with our infrastructure improvement program • Increased the Group’s 2022 annual dividend by eight cents, or 8.7%, which represents our 55th consecutive annual dividend increase • Raised net proceeds of $195.9 million through an at-the-market equity program, better matching the Company’s capital needs with funding • Maintained the Group’s strong credit rating of A+ stable and AA− for first mortgage bonds and “exceptional” liquidity rating from Standard & Poor’s (one of the only North American utilities to do so) • Achieved consolidated Group earnings per share of $1.96 in 2021, representing a return on equity (determined in accordance with GAAP) of 9.6% as reported in item 7 of the Group’s Form 10-K for the year ended December 31, 2021 as filed with the SEC

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	Regulatory: File the Cal Water 2021 General Rate Case (GRC), including its Infrastructure Improvement Plan			• Secured more than $20 million in state relief funds for customers who accrued overdue balances during the pandemic • Cal Water filed its 2021 General Rate Case, including our Infrastructure Improvement Plan, on July 2, 2021 requesting water infrastructure investments of $1.0 billion in accordance with the rate case plan for all regulated operating districts for the years 2022, 2023, and 2024 • On May 3, 2021, Cal Water filed a required application with the CPUC to review its cost of capital for 2022 through 2024. Cal Water requested a return on equity of 10.35%, a cost of debt of 4.23%, and a 53.4% equity capital structure • Advice Letter 2387, filed with the CPUC in 2020, was approved on January 29, 2021 authorizing the recovery of $96.1 million in costs associated with the Palos Verdes Peninsula Water Reliability Project • In November of 2021, Cal Water requested escalation rate increases for 2022 in 19 regulated districts that passed the earnings test, increasing annual adopted gross revenue by $21.7 million
	Customer Service and Water Quality: Complete key strategic projects in the areas of customer service and water quality including: • Meet or exceed all customer service standards as set by the PUC • Meet or exceed all water quality standards in every state, every day, with no primary or secondary water quality violations in 2021 • Meet or exceed all wastewater discharge standards in every system, every day, in 2021			• Met all state and federal primary and secondary water quality standards in all water systems operated by Group during the pandemic • Met requirements of America’s Water Infrastructure Act (AWIA) of 2018, including submittal deadlines for risk and resilience assessments for priority 3 systems and emergency response plans for priority 2 and 3 systems • Exceeded nine CPUC standards that encompass key measurements for telephone responsiveness, service responsiveness, billing accuracy, and general levels of customer complaints (the nine CPUC customer service standards are found in the CPUC’s General Order 103-A) • Expanded customer service hours at our regional service to 7 a.m. to 7 p.m., and introduced service via on-line chat • Maintained an excellent environmental standards record throughout 2021
	Employee Retention and Development: Implement key strategic projects in the area of employee retention and development			• Continued to execute on our Leadership Development Strategy by developing and implementing new manager training program to supplement refreshed management training program • Maintained our Emergency Operations Center to enable communication and coordination on instituting new COVID-19 protocols across operations and offices in four U.S. states, including 22 California districts • Received our second Silver Stevie® Award, in recognition of the Most Valuable Corporate Response in the COVID-19 Response category by the American Business Awards® (ABA) • Named a “Top 100 Workplace” in the San Francisco Bay Area for the 10th consecutive year by the Bay Area News Group • Received recertification as a Great Place to Work® by the Great Place to Work® Institute for the sixth consecutive year • Graduated our first Future Leaders of Water (FLOW) class

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Performance-Based Short-Term Incentive (STI) Compensation

As strategic goals are long-term in nature, we maintain an annual performance-based short-term incentive compensation program for officers designed to align annual performance and achievement with the long-term strategic goals of the Group. The performance-based short-term incentive compensation is fully at risk with payout, dependent upon achievement of certain performance objectives over a one-year performance period.

The Committee considered a number of factors when establishing the 2021 short-term incentive performance metrics, including:

•

Our long-term strategic plan

•

Historical performance

•

The regulatory environment in which we operate

•

Feedback and analysis from our independent compensation consultant

•

Stockholder feedback

•

Management performance

The performance metrics are intended to foster and enhance cross-functional integration, customer relationships, continuous improvement, and team accountability while focusing on key corporate goals and initiatives. Targets for each of the performance metrics were designed to be challenging but achievable given strong management performance.

For 2021, the Committee granted the opportunity for our officers to receive short-term performance incentive (STI) awards as follows:

President & CEO

Target STI Payout: 100% of base salary

Actual STI Payout Range: 0% to 200% of target, based on performance

All Other Officers

Target STI Payout: 30% of base salary

Actual STI Payout Range: 0% to 200% of target, based on performance

Payment of the short-term performance incentive awards is typically made in March, following the Group’s receipt of audited financial statements and the subsequent certification of the Group’s performance by the Committee. See below for additional information regarding the performance goals and resulting payouts under the annual short-term incentive program for 2021.

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Water Quality
Weight: 20%

This metric evaluates performance based on number of procedural violations and violations of primary and secondary drinking water standards. The CPUC has authority to set drinking water standards for Cal Water. It has adopted the California State Water Resources Control Board, Division of Drinking Water (DDW) standards, which also incorporate U.S. Environmental Protection Agency (EPA) drinking water standards. Similarly, the Group’s subsidiaries in Washington, Hawaii, and New Mexico are regulated by their respective state health regulators and the EPA. We have continued to include all state operations in the performance metric for primary water quality. The secondary and procedural water quality metrics measure activity in the California subsidiary only, but in the future, secondary and procedural water quality metrics could include other states’ compliance.

•

A primary drinking water standard violation is related to public health, either acute or long-term

•

A secondary drinking water standard violation is related to taste or aesthetics, such as excessive iron and manganese, which can generate customer complaints

•

A procedural violation is a missed sample or other non-compliance item that is not a violation of a primary or secondary standard

We make it a priority to meet all water quality standards, every day, in every service area. For this reason, the target performance level was set for no primary water standard violations, two or fewer secondary water standard violations, and no more than four procedural violations.

Performance Level*

Primary Water
Standards
Violations
(all states)

Secondary Water
Standards
Violations
(California only)

Procedural
Violations
(California only)

Goal
Achieved

Maximum

200%

Target

2 or fewer

Up to 4

100%

Threshold

1 or fewer

4 or fewer

Up to 8

50%

An additional tier applies between the target and maximum level

Customer Service
Weight: 20%

This metric measures against CPUC standards and three internal performance indicators for all California districts, Hawaii, New Mexico, and Washington, including key measurements for telephone responsiveness, service responsiveness, billing accuracy and timeliness, and general levels of customer complaints. CPUC customer service standards are found in the CPUC’s General Order 103-A.

The Customer Service metric is evaluated each quarter for 10 measurements in 20 California service areas, Hawaii, New Mexico, and Washington for an annual target of 863 – 848 and a maximum annual measurement of 920.

Performance Level*

Criteria

Goal
Achieved

Maximum

99.1% of maximum annual metric

200%

Target

92.1.% of maximum annual metric

100%

Threshold

90.0% of maximum annual metric

50%

Multiple tiers apply between the threshold and target level, and between the target and maximum level.

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Utility Plant Investment Weight: 20%	The annual Board-approved capital expenditures budget is the target for this metric. Investment in utility plant, property, and equipment is a driver of stockholder return and a key component of providing reliable, high-quality water service to customers. This metric is updated each year to reflect the annual approved capital program and budget for the Group and its subsidiaries, and is tied to regulatory approvals. For 2021, the annual Board-approved capital expenditure budget and target performance level was set at $295 million.
	Performance Level*	2021 (In Millions)	Goal Achieved
	Maximum	$315	200%
	Target	$295	100%
	Threshold	$265	25%
	* Multiple tiers apply between the threshold and target level, and between the target and maximum level.

Earnings Per Share (EPS)
Weight: 20%

This metric measures the annual budget-to-actual performance of the Company. Specifically, this measure compares the actual diluted earnings per share to the forecasted diluted earnings per share for the calendar year. The forecasted diluted earnings per share is adopted during the budget process by the Board of Directors each year at its January meeting. By adhering to budgets, management is able to demonstrate to the Board, stockholders and customers that the Company is effective at managing controllable costs and has the ability to efficiently execute its business plan.

Performance Level*

EPS Variance
From Budget

Goal
Achieved

Maximum

Over 10%

200%

Target

−2.5% to 2.5%

100%

Threshold

−7.6% to −10%

25%

Multiple tiers apply between the threshold and target level, and between the target and maximum level.

CALIFORNIA WATER SERVICE GROUP | 2022 Proxy Statement 59

TABLE OF CONTENTS

Emergency Preparedness and Safety
Weight: 20%

This metric is measured annually and is comprised of five safety program components. These five components include Community Emergency Operations Center (EOC) training, full attendance at Cal Water mandated safety training for all employees (minimum of five training topics annually), Total Case Incident Rate (TCIR), which represents the average number of work-related injuries incurred by 100 workers during a one-year period as measured against California companies, the number of preventable vehicle accidents, and the number of unannounced site safety audit and immediate onsite reviews. The five safety components are weighted as follows:

•

Community EOC Training measure – 20%

•

Training attendance rate measure – 20%

•

TCIR measure – 20%

•

Preventable vehicle accident measure – 20%

•

Unannounced site safety audit and immediate onsite review – 20%

Focused on improving the management of these safety programs, our officers have set this metric to improve performance from current conditions towards industry averages, where applicable, and performance expectations.

Community EOC Training

Performance Level*

Performance Target

Goal
Achieved

Maximum

Conduct 12 community EOC trainings

200%

Target

Conduct eight community EOC trainings

100%

	PROXY SUMMARY					1
	CORPORATE GOVERNANCE MATTERS					12
	PROPOSAL NO. 1 – ELECTION OF DIRECTORS					12
	CORPORATE GOVERNANCE PRACTICES					28
	COMPENSATION DISCUSSION AND ANALYSIS					47
	1 2021 Compensation Overview					47
	2 NEO Compensation Components and Pay Mix					48
	3 Executive Compensation Governance and Process					51
	4 2021 Performance Goals & Performance					54
	5 Other Compensation Programs					67
	6 Executive Compensation Policies and Practices					68
	REPORT OF THE ORGANIZATION AND COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION					78
	ORGANIZATION AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION					78

	PROCEDURES FOR APPROVAL OF RELATED PERSON TRANSACTIONS					78
	PROPOSAL NO. 2 – ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION					79
	REPORT OF THE AUDIT COMMITTEE					80
	RELATIONSHIP WITH THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM					81
	PROPOSAL NO. 3 – RATIFICATION OF SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2022					82
	PROPOSAL NO. 4 – APPROVAL OF AMENDMENT TO THE GROUP’S CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK					83
	OTHER INFORMATION					84
	FREQUENTLY ASKED QUESTIONS					88


					Chairman, California Water Service Group Mr. Nelson is Chairman of the Board of the Group and its subsidiaries. He is a director of the California Chamber of Commerce and a past president of the National Association of Water Companies (NAWC). Mr. Nelson has a strong record of operational and strategic leadership in the public utility business, including his 17-plus years of experience as the former President & CEO of the Group. An engineer by training with a graduate degree in business administration, he gained extensive senior executive experience at Pacific Gas & Electric Company. He has a vast understanding of the water industry from his role as the former President & CEO of the Group and from his leadership roles representing the water profession nationally at NAWC as well as in California at the State Chamber of Commerce.