CMS Energy : 2024 Annual Shareholders Meeting (Annual Shareholder Meeting Q&A)

Annual Meeting of Shareholders

Submitted Questions - May 3, 2024

CMS SHAREHOLDER QUESTION: How about a little more money on dividends to take care of shareholders?

Please know, we are committed to growing the dividend, which you saw in our year-end earnings call. Our target payout ratio is about 60% over time, so you can expect that dividend growth might trail earnings growth in the near-term, but eventually we'd expect them to align once we achieve our desired payout ratio. For context, some peers are guiding lower to 55%. Issuing equity to pay a dividend not only dilutes existing ownership but is also the most expensive form of financing.

CMS SHAREHOLDER QUESTION: The Company has in place a director resignation bylaw that provides the Board post election discretion to determine whether to accept or reject the resignation of an incumbent director who fails to be elected by a majority vote.

Under the CMS Articles of Incorporation, CMS Bylaws and Principles, any Director nominee who receives less than a majority of the votes cast by the CMS shareholders at a regular election shall promptly tender his or her resignation. For this purpose, a majority of the votes cast means that the number of shares voted "for" a Director must exceed 50% of the votes cast with respect to that Director, not counting abstentions. Upon receipt of such a tendered resignation, the CMS Governance Committee shall consider and recommend to the CMS Board whether or not to accept the resignation. The CMS Board will act on the CMS Governance Committee's recommendation within 90 days following certification of our shareholder vote, and contemporaneously with that action will cause CMS to publicly disclose the CMS Board's decision whether to accept or decline such Director's resignation offer (and the reasons for rejecting the resignation offer, if appropriate). The Director who tenders his or her resignation pursuant to the standard will not be involved in either the CMS Governance Committee's recommendation or the CMS Board's decision to accept or decline the resignation. A plurality vote standard would control any contested Director election given the complexity of such election.