SCHEDULE 14C INFORMATION

Information Statement Pursuant to Section 14(c)

of the Securities Exchange Act of 1934 (Amendment No.     )

Check the appropriate box:

Southern California Gas Company

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

SOUTHERN CALIFORNIA GAS COMPANY

NOTICE OF

ANNUAL SHAREHOLDERS MEETING

The Southern California Gas Company (SoCalGas or the company) Annual Shareholders Meeting will be held on May 21, 2020, at 10:00 a.m., local time, at 488 8^th Avenue, San Diego, California. SoCalGas is an indirect subsidiary of Sempra Energy.

The 2020 Annual Shareholders Meeting will be held for the following purposes:

(1) To elect directors.

(2) To obtain advisory approval of our executive compensation.

(3) To transact any other business that may properly come before the meeting.

The Annual Shareholders Meeting is a business-only meeting. It will not include any presentations by management and the company does not encourage shareholder attendance, especially in light of the public health impact of the COVID-19 pandemic. Due to these public health concerns and to help protect the health and well-being of our shareholders, employees and other stakeholders, the company may establish additional rules or restrictions for the meeting if any shareholders decide to attend. Any such rules or restrictions would be based on guidelines and orders from health agencies and governmental authorities and the company’s judgment on how best to help protect the safety of its shareholders, employees and other stakeholders, taking into consideration the conditions at the time of the meeting. Additional information about the company is included in its Annual Report to Shareholders, which is being mailed to shareholders together with this Notice of Annual Shareholders Meeting and the accompanying Information Statement.

Shareholders of record at the close of business on March 25, 2020, are entitled to notice of and to vote at the Annual Shareholders Meeting and any adjournment or postponement thereof. In addition, only such shareholders are entitled to attend the Annual Shareholders Meeting and any adjournment or postponement thereof. Subject to any additional rules or restrictions that may be implemented for the meeting as described above, shareholders who own shares registered in their names will be admitted to the meeting upon verification of record share ownership. Shareholders who own shares through banks, brokers or other nominees must present proof of beneficial share ownership (such as the most recent account statement prior to March 25, 2020) to be admitted.

April R. Robinson

Corporate Secretary

Important Notice Regarding the Availability of Information Statement Materials for the

SoCalGas Annual Shareholders Meeting to be Held on May 21, 2020.

The Information Statement for the Annual Shareholders Meeting to be held on May 21, 2020

and the Annual Report to Shareholders are available on the Internet at

http://www.astproxyportal.com/ast/25974.

INFORMATION STATEMENT

WE ARE NOT ASKING YOU FOR A PROXY AND

YOU ARE REQUESTED NOT TO SEND US A PROXY

Southern California Gas Company is providing this Information Statement to its shareholders in connection with its Annual Shareholders Meeting to be held on May 21, 2020, at 10:00 a.m., local time, at 488 8^th Avenue, San Diego, California. The Notice of Annual Shareholders Meeting, this Information Statement and the 2019 Annual Report to Shareholders are being mailed to shareholders beginning on or about April 21, 2020.

THE COMPANY

Southern California Gas Company, which we refer to as SoCalGas or the company, is an indirect subsidiary of Sempra Energy. SoCalGas’ principal executive offices are located at The Gas Company Tower, 555 West Fifth Street, Los Angeles, California 90013. Its telephone number is (213) 244-1200.

Additional information about the company is included in the 2019 Annual Report to Shareholders jointly produced by Sempra Energy, SoCalGas and Sempra Energy’s other subsidiary with U.S. publicly traded securities, San Diego Gas & Electric Company (SDG&E), which is being mailed to shareholders together with this Information Statement. The Annual Report to Shareholders includes the company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the 2019 Form 10-K), which has been filed with the U.S. Securities and Exchange Commission (the SEC) jointly by Sempra Energy, SoCalGas and SDG&E. These documents, as well as other documents SoCalGas files with the SEC, also can be viewed online on the SEC’s website at www.sec.gov and are available on the Sempra Energy website at www.sempra.com under the “Investors” and “SEC Filings” tabs. The company will furnish a copy of its 2019 Form 10-K (excluding exhibits, except those that are specifically requested) without charge to any of its shareholders who so requests by writing to the company’s Corporate Secretary at 488 8^th Avenue, San Diego, California 92101.

All website references in this Information Statement are inactive textual references, and the information on such websites does not constitute a part of this Information Statement.

OUTSTANDING SHARES AND VOTING RIGHTS

The SoCalGas Board of Directors has fixed March 25, 2020, as the record date for determining the shareholders of SoCalGas entitled to notice of and to vote at the SoCalGas 2020 Annual Shareholders Meeting and any adjournment or postponement thereof. On that date, SoCalGas’ outstanding shares consisted of 91,300,000 shares of common stock and 862,043 shares of preferred stock. All SoCalGas common stock and 50,970 shares of SoCalGas preferred stock are owned by Pacific Enterprises (PE), a wholly owned direct subsidiary of Sempra Energy.

In electing directors, each share is entitled to one vote for each of the four director positions and shareholders will be entitled to cumulate votes if any shareholder gives notice of an intention to do so at the meeting and prior to the voting. If that notice is given, all shareholders may cast all of their votes for any one director candidate whose name has been placed in nomination prior to the voting or distribute their votes among two or more such candidates in such proportions as they may determine. In voting on any other matters that may be considered at the Annual Shareholders Meeting and any adjournment or postponement thereof, each share is entitled to one vote. The company does not expect there to be any broker non-votes at the Annual Shareholders Meeting. However, if there are any broker non-votes, each will be counted for purposes of determining the presence or absence of a quorum for the transaction of business, but will not be considered a vote cast with respect to the election of directors or any other proposal for which it occurs.

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The shares of SoCalGas owned by PE and indirectly owned by Sempra Energy represent over 99% of SoCalGas’ outstanding shares and the number of votes entitled to be cast on the matters to be considered at the Annual Shareholders Meeting and any adjournment or postponement thereof. PE has advised SoCalGas that it intends to vote “FOR” each of the nominees for election to the SoCalGas Board of Directors and “FOR” the advisory approval of our executive compensation.

GOVERNANCE OF THE COMPANY

The business and affairs of SoCalGas are managed and all corporate powers are exercised under the direction of its Board of Directors in accordance with the California General Corporation Law and SoCalGas’ Restated Articles of Incorporation and Bylaws, as amended.

Board of Directors

Board Meetings; Annual Shareholders Meeting

During 2019, the Board of Directors of SoCalGas held 11 meetings and acted 13 times by unanimous written consent. With the exception of Martha B. Wyrsch, who retired from the Board of Directors on March 1, 2019, each director attended at least 75% of the meetings that occurred during 2019 when he or she was a director.

The Annual Shareholders Meeting is a business-only meeting without presentations by management. The company does not encourage attendance at the meeting by public shareholders, especially in light of the public health impact of the COVID-19 pandemic, as described in the Notice of Annual Shareholders Meeting that accompanies this Information Statement. The Board of Directors encourages all nominees standing for election as directors to attend the Annual Shareholders Meeting. All directors in office as of the 2019 Annual Shareholders Meeting attended that meeting. You may request directions to be able to attend the 2020 Annual Shareholders Meeting and vote in person by contacting the company’s Corporate Secretary at 488 8^th Avenue, San Diego, California 92101.

Leadership Structure

J. Bret Lane, our Chief Executive Officer, serves as Chairman of our board and the board does not have an independent lead director. As a subsidiary of Sempra Energy, SoCalGas is not subject to stock exchange listing standards requiring independent directors and various board committees and, accordingly, has not established independence standards for its directors. All of the directors of the company are also officers of the company or Sempra Energy and, as a result, none qualifies as an independent director under the standards established by the New York Stock Exchange (NYSE) for boards of directors or committees thereof. The SoCalGas Board of Directors does not maintain any committees.

Nominees for election as directors are determined by the SoCalGas Board of Directors, and the board will not consider director candidates recommended by shareholders other than its direct and indirect parent companies. The board currently consists of J. Bret Lane, Chairman and Chief Executive Officer of SoCalGas, and three officers of Sempra Energy with varying professional and business expertise. The board has nominated the four current directors for re-election to the board at the Annual Shareholders Meeting. Although Sempra Energy and SoCalGas promote diversity in hiring employees and in the appointment of their officers, diversity is not further considered in selecting the individuals who serve as directors of SoCalGas.

Sempra Energy’s Board of Directors is composed of a substantial majority of independent directors under NYSE standards and maintains several standing committees, of which the Audit, Compensation and Corporate Governance Committees are composed entirely of independent directors. The Sempra Energy Board of Directors also has adopted a Code of Business Conduct and Ethics for Directors and Senior Officers that applies to all of the directors and officers of SoCalGas, and officers of SoCalGas also are subject to a Code of Business Conduct that applies to all employees of SoCalGas.

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Board Role in Risk Oversight

Assessing and monitoring risks and risk management are among the functions of the SoCalGas Board of Directors. SoCalGas’ management, including the company’s Vice President and Chief Risk Officer, is responsible for identifying and moderating risk. Risk oversight at the management level is governed by the Enterprise Risk Management and Compliance Committee, which is composed of senior management and chaired by the Chief Operating Officer and is responsible for establishing enterprise risk management policies and practices across SoCalGas. Other management-level governing bodies also review and mitigate risk, including SoCalGas’ Energy Procurement Risk Management Committee, which is composed of members of senior management and chaired by the company’s Chief Financial Officer and is responsible for risk management within the company’s natural gas procurement department. The board fulfills its risk oversight function by, among other things, reviewing and overseeing the company’s strategic, financial and operating plans, receiving other direct reports from management and discussing major risk categories with management at least on an annual basis or as needed due to changes in risk profiles, receiving periodic updates from the Chief Risk Officer, and staying informed about developments in our industry. The board believes that its leadership structure, with SoCalGas’ Chief Executive Officer serving as Chairman, supports the board’s risk oversight function by facilitating the sharing of information about company risks from management to the board.

Review of Related Person Transactions

SEC rules require that SoCalGas disclose certain transactions involving more than $120,000 in which the company is a participant and any of its directors, nominees as directors or executive officers, or any member of their immediate families, has or will have a direct or indirect material interest. The SoCalGas Board of Directors has adopted a written policy that requires the board to review and approve or ratify any such “related person transaction” that is required to be disclosed. When evaluating any such transaction, the board focuses on a variety of factors on a case-by-case basis, including the identity of the related party, the nature and terms of the transaction and the dollar amount involved. There were no transactions requiring such review during 2019 or 2020 through the date of mailing this Information Statement.

Communications with the Board

Shareholders and other interested parties who wish to communicate with the SoCalGas Board of Directors or any individual director may do so by writing directly to the board or the individual director at the address of our principal executive offices.

Compensation of Directors

All of our directors are employees of SoCalGas or Sempra Energy and are not otherwise compensated for their service on the SoCalGas Board of Directors.

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Representatives of Deloitte & Touche LLP, the independent registered public accounting firm for SoCalGas, are expected to attend the Annual Shareholders Meeting. They will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions from shareholders. Deloitte & Touche LLP or its predecessors have continuously served as the independent public accounting firm for SoCalGas or its parent company since 1937. Deloitte & Touche LLP also serves as the independent registered public accounting firm for Sempra Energy and SDG&E.

The following table shows fees paid to Deloitte & Touche LLP for services provided to SoCalGas for 2019 and 2018 (in thousands of dollars).

The Audit Committee of Sempra Energy’s Board of Directors (the Sempra Energy Audit Committee) is directly responsible for the appointment, compensation, retention and oversight (including the oversight of audit fee negotiations) of the independent registered public accounting firm for Sempra Energy and its subsidiaries, including SoCalGas. As a matter of good corporate governance, the SoCalGas Board of Directors also reviewed the performance of Deloitte & Touche LLP and concurred with the determination by the Sempra Energy Audit Committee to retain the firm as its independent registered public accounting firm for 2020. Sempra Energy’s Board of Directors has determined that each member of its Audit Committee is an independent director and is financially literate, and that Jack T. Taylor, who chairs the committee, is an audit committee financial expert as defined by the rules of the SEC.

Except where pre-approval is not required by SEC rules, the Sempra Energy Audit Committee pre-approves all audit, audit-related and permissible non-audit services provided by Deloitte & Touche LLP for Sempra Energy and its subsidiaries, including SoCalGas, which includes all services provided by Deloitte & Touche LLP to SoCalGas for 2019 and 2018. The committee’s pre-approval policies and procedures provide for the general pre-approval of specific types of services and give detailed guidance to management as to the services that are eligible for general pre-approval. They require specific pre-approval of all other permitted services. For both types of pre-approval, the committee considers whether the services to be provided are consistent with maintaining the firm’s independence. The policies and procedures also delegate authority to the chair of the committee to address any requests for pre-approval of services between committee meetings, with any pre-approval decisions to be reported to the committee at its next scheduled meeting.

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AUDIT REPORT

The Board of Directors of SoCalGas has reviewed and discussed with the company’s management the audited financial statements of the company for the year ended December 31, 2019.

The Sempra Energy Audit Committee has discussed with Deloitte & Touche LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission. The Sempra Energy Audit Committee also has received from Deloitte & Touche LLP the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding its communications with the Sempra Energy Audit Committee concerning Deloitte & Touche LLP’s independence, and the Sempra Energy Audit Committee has discussed Deloitte & Touche LLP’s independence with the firm.

Based on these considerations, the Board of Directors of SoCalGas directed that the audited financial statements of SoCalGas be included in its Annual Report on Form 10-K for the year ended December 31, 2019, for filing with the U.S. Securities and Exchange Commission.

BOARD OF DIRECTORS

Randall L. Clark

J. Bret Lane

Lisa Larroque Alexander

Trevor I. Mihalik

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SHARE OWNERSHIP

All of the outstanding shares of SoCalGas’ common stock are owned by PE and all of the outstanding shares of PE’s common stock are owned by Sempra Energy. None of the directors or officers of SoCalGas owns any shares of SoCalGas’ preferred stock, and SoCalGas is unaware of any person, other than PE, who beneficially owns more than 5% of its outstanding shares of preferred stock.

The following table shows the number of shares of Sempra Energy common stock beneficially owned on March 25, 2020, by each director of SoCalGas, by each executive officer of SoCalGas named in the executive compensation tables of this Information Statement (named executive officers), and by all current directors and current executive officers of SoCalGas as a group. The shares of common stock beneficially owned by our directors and executive officers as a group total less than 1% of Sempra Energy’s outstanding shares of common stock. In calculating these percentages, shares under the heading “Phantom Shares” are not included because these phantom shares cannot be voted and these shares either may only be settled for cash or cannot be settled for common stock within 60 days after March 25, 2020. In addition, in calculating these percentages we used the 292,435,571 shares of Sempra Energy common stock outstanding as of March 25, 2020.

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Based on a review of filings made under Section 13(g) of the Securities Exchange Act of 1934, as amended (the Exchange Act), as of December 31, 2019, the persons or entities known by us to be beneficial owners of more than 5% of Sempra Energy common stock were as follows:

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ELECTION OF DIRECTORS

At the Annual Shareholders Meeting, four directors will be elected to hold office until the next annual shareholders meeting and until their respective successors have been elected and qualified or until their earlier resignation or removal. The four director candidates receiving the highest number of affirmative votes will be elected as directors of the company. Abstentions and votes against any director, if any, will have no effect on the outcome of the election of directors (but if you indicate “ABSTAIN” on any or all nominees, your vote will be counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Shareholders Meeting and any adjournment or postponement thereof).

The following sets forth information, as of the mailing date of this Information Statement, regarding the director candidates for election at the Annual Shareholders Meeting. This information includes biographical information, business experience and service on other boards. In addition, we discuss below the specific qualifications, attributes and skills that make each director candidate a well-qualified and valuable board member.

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ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION

Pursuant to Section 14A of the Exchange Act, we are asking shareholders to approve an advisory resolution on the compensation of the named executive officers, as reported in this Information Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our 2019 executive compensation program. We currently provide our shareholders the opportunity to vote on a say-on-pay proposal every three years, and as a result, the next vote on a say-on-pay proposal following the Annual Shareholders Meeting will occur at our 2023 Annual Shareholders Meeting.

We are asking our shareholders to indicate their support for the compensation of our named executive officers as described in this Information Statement by voting in favor of the following resolution:

RESOLVED, that, as an advisory matter, the shareholders of Southern California Gas Company approve the compensation paid to the company’s named executive officers as disclosed in this Information Statement pursuant to Item 402 of Regulation S-K promulgated by the SEC, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.

Approval requires the receipt of “FOR” votes constituting a majority of the shares represented and voting at the Annual Shareholders Meeting at which a quorum is present, and the approving majority also must represent more than 25% of our outstanding shares of voting stock. If you indicate “ABSTAIN,” your vote will be counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Shareholders Meeting and any adjournment or postponement thereof, but will not be considered a vote cast with respect to this proposal.

This say-on-pay vote is advisory only and will not be binding on the company.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE SUMMARY

What information is provided in this section of the Information Statement?

In this Compensation Discussion and Analysis, we:

Who are the named executive officers?

This Compensation Discussion and Analysis focuses on the compensation of the following individuals, which we collectively refer to as our named executive officers:

Table 1

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The amounts shown in this Information Statement for Mss. Brown and DeMontigny and Messrs. Barrett and Folkmann include all of their compensation for 2019 as an officer of SoCalGas and as an officer or employee of Sempra Energy or SDG&E, as applicable.

The amounts shown in this Information Statement for Mr. Chase include the severance benefits he received in connection with his April 2, 2019 separation from Sempra Energy’s California utilities SDG&E and SoCalGas (the California utilities). See “Compensation Components — Severance and Change in Control Arrangements” below for additional information.

What is our executive compensation philosophy and what are the goals of our executive compensation program?

Our Board of Directors sets the company’s executive pay philosophy. Our executive compensation philosophy emphasizes:

Our compensation program goals include:

Elements of our 2019 executive pay program that exemplify our pay-for-performance philosophy and goals include:

We believe this compensation philosophy enables us to attract, motivate and retain key executive talent and promote strong, sustainable long-term performance.

What compensation governance measures are in place?

Our compensation practices, which are highlighted below, reflect our pay-for-performance philosophy and goals and our commitment to sound corporate governance.

What We Do:

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What We Don’t Do:

DETERMINING EXECUTIVE PAY

How is external market data used in determining pay?

External pay data is used to help align executive compensation levels with the labor market. The SoCalGas Board of Directors views the labor market for our most senior positions as a nationwide, broad cross-section of companies in various industries.

During this benchmarking process, the board reviews general industry market data from the Aon Hewitt Total Compensation Management (TCM) Database for non-financial services Fortune 500 companies with revenues between $5.5 billion and $22.75 billion. The board also references other survey data sources, including utility-specific survey data, periodically. Information about specific companies in the survey data is not provided to the board.

In making compensation decisions, the board generally targets alignment of compensation with the 50^th percentile of the general industry benchmarking data. This applies to target compensation in total and by component (base salaries, target performance-based annual bonuses and target long-term equity-based incentives). Positioning relative to the 50^th percentile may vary based on factors such as time in position, performance, and the comparability of market benchmark positions to the scope and structure of our positions. Actual compensation may be higher or lower than target compensation, as it reflects actual performance, payouts of performance-based annual bonuses and payouts under our LTIPs.

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How is internal equity used in determining pay?

Internal pay equity principles are used to determine the compensation for positions that are unique or difficult to benchmark against market data. Internal equity is also considered in establishing compensation for positions considered to be equivalent in responsibilities and importance, especially where precise external data is not available.

What is SoCalGas management’s role in determining pay?

SoCalGas’ CEO attends the non-executive session of each SoCalGas board meeting. Our human resources department assists the board by preparing compensation information and analyses for its consideration. Our accounting, finance and law departments also support the board with respect to compensation-related matters as needed. The board members generally receive presentation materials in advance of board meetings.

None of our executive officers determine or approve any element or component of their own compensation, nor are they present during the board’s deliberation regarding their own compensation. The board seeks our CEO’s views on the performance of our other executive officers, and he makes pay recommendations for these officers.

Are the results of the most recent shareholder advisory vote on executive compensation considered in determining executive pay?

Our shareholders presently have the opportunity to cast an advisory vote on our executive compensation, or a “say-on-pay” vote, once every three years at our annual shareholders meetings. At our 2017 Annual Shareholders Meeting, which was the last time a say-on-pay vote occurred, the say-on-pay proposal received approval from every share that was voted on the proposal at the meeting. In light of our shareholder base, particularly PE’s ownership of the vast majority of our outstanding shares, our Board of Directors has not considered the results of this vote in determining executive compensation policies or executive pay.

MANAGING RISK IN COMPENSATION PLANS

SoCalGas seeks to mitigate risk in our executive compensation program by balancing short-term and long-term incentives and linking a higher proportion of total compensation to long-term incentives. Risk is also managed through incentive plan design and the selection of performance measures.

Our compensation risk management is further strengthened by our clawback policy, which applies to both short-term and long-term incentive plans and is included in both executive and non-executive award agreements, our anti-hedging and pledging policies and our executive share ownership requirements, each of which is discussed in further detail in this Compensation Discussion and Analysis below.

An independent consultant, Exequity, conducted a risk assessment of our 2019 compensation programs. Exequity’s findings concluded that our compensation programs do not create risks that are likely to have a material adverse impact on the company. Specific examples of safeguards and risk mitigating features found in our executive compensation programs are listed below.

Our 2019 long-term equity-based incentives include the following risk mitigation features:

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Our 2019 performance-based annual bonuses include the following risk mitigation features:

PAY MIX

What is “pay mix”?

Pay mix is the relative value of a named executive officer’s total pay opportunity for each of the three components of total direct compensation at target company performance. Figure 1 shows the 2019 pay mix for our CEO.

Figure 1

Note: Based on 2019 annual base salary, 2019 target performance-based annual bonus and the target grant date value of the CEO’s 2019 annual LTIP award.

Why is pay mix important?

Our pay mix is designed to align the interests of executives with the interests of shareholders and other stakeholders by providing a much greater proportion of target annual compensation through performance-based annual bonuses and long-term equity-based incentives rather than base salary. This means that most pay is variable and will increase or decrease based on company and individual performance. As shown in Figure 1, more than half of Mr. Lane’s total target pay opportunity in 2019 was in the form of long-term equity-based incentives and over 70% was in the form of variable incentive pay.

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Actual pay mix may vary substantially from target pay mix. This may occur as a result of company and individual performance, which greatly affects annual bonuses, and Sempra Energy common stock performance, which significantly impacts the ultimate value realized for stock-based awards.

Figure 2 shows the percentage of each component of the total 2019 pay opportunity at target company and individual performance for each of our named executive officers.

Figure 2

Note: Base salary is the base salary as of December 31, 2019. Performance-based annual bonus is the performance-based annual bonus target as of December 31, 2019. Long-term equity-based incentive amounts are based on the target annual LTIP award percentage as of December 31, 2019 and do not include special equity awards. Messrs. Folkmann and Chase are not included because they were no longer with SoCalGas as of December 31, 2019.

COMPENSATION COMPONENTS

What are the primary components of SoCalGas’ executive compensation program?

The primary components of our executive compensation program are:

Additional benefits include health and welfare programs, retirement and savings plans, personal benefits and severance pay.

All of our named executive officers generally participate in the same compensation program. However, compensation levels for named executive officers vary substantially based on the roles and responsibilities of the individual officers.

What is the role of base salaries in SoCalGas’ executive compensation program, and how are base salaries determined and reviewed?

Our executive compensation program emphasizes performance-based pay. This includes annual cash bonuses and long-term equity-based incentive awards. However, base salaries remain a necessary and typical element of compensation for attracting and retaining outstanding employees at all levels.

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The SoCalGas Board of Directors annually reviews base salaries for executive officers. The board considers the following factors in its review:

What base salary adjustments were made in 2019?

The following salary adjustments for our named executive officers were made in 2019:

How are potential bonus opportunities determined, and what were the potential bonus opportunities for the named executive officers for 2019 performance?

Each year the SoCalGas Board of Directors establishes performance measures and dollar guidelines for performance-based cash bonus payments under the SoCalGas Executive Incentive Compensation Plan (the EICP) and SoCalGas and SDG&E Shared Services Executive Incentive Compensation Plan (the Shared Services Plan). Consistent with our pay-for-performance philosophy, the performance measures do not provide for any bonus payment unless the company surpasses the threshold (minimum) performance level for the year. Bonus opportunities increase from zero for performance at the threshold level to 200% of target for performance at maximum.

The board may apply discretion in determining awards, including determining the results of performance measures and taking into consideration the contributions of each named executive officer or other factors it deems relevant.

Potential bonus opportunities at threshold, target and maximum company performance are expressed as a percentage of each named executive officer’s base salary below.

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BONUS THRESHOLDS, TARGETS AND MAXIMUMS AS OF DECEMBER 31, 2019 AS A PERCENTAGE OF BASE SALARY

Table 2

Note: Mr. Chase was not eligible for a 2019 performance-based annual bonus.

What were the 2019 annual bonus performance goals for the named executive officers?

The 2019 performance measures for the SoCalGas Executive Incentive Compensation Plan consisted of (i) operational safety performance measures, (ii) SoCalGas and Sempra Energy earnings adjusted for EICP purposes (EICP Earnings), (iii) individual performance, and (iv) customer service and stakeholder-focused measures. The relative weights of these measures as a percentage of the overall target were 45% for operational safety performance measures, 30% for EICP Earnings, 15% for individual performance, and 10% for customer service and stakeholder-focused measures.

Mr. Folkmann participated in the Shared Services Plan when he served as Vice President, Chief Financial Officer, Chief Accounting Officer, Controller and Treasurer of SoCalGas and SDG&E and he participated in the SDG&E Executive Incentive Compensation Plan when he served as Senior Vice President, Chief Financial Officer, Chief Accounting Officer, Controller and Treasurer of SDG&E. The 2019 performance measures for the Shared Services Plan were 50% for the SoCalGas performance measures described above and 50% for similar performance measures for SDG&E.

Mss. Brown and DeMontigny participated in Sempra Energy’s performance-based annual bonus plans prior to their respective transfers to SoCalGas, which included performance measures based on Sempra Energy’s 2019 earnings and individual performance.

How were the 2019 Executive Incentive Compensation Plan earnings goals determined?

The SoCalGas EICP Earnings target of $465 million was based on SoCalGas’ financial plan with certain adjustments for incentive plan purposes. Targets for the operational measures were based on safety, customer service and other stakeholder-focused goals.

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EICP Earnings for SoCalGas and Sempra Energy may be higher or lower than earnings reported in the companies’ financial statements due to certain predefined adjustments.

Consistent with the approach taken in prior years, at the beginning of the year, it was determined that the calculation of SoCalGas earnings and Sempra Energy earnings for EICP purposes would be adjusted as follows:

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What were the performance results for the 2019 Executive Incentive Compensation Plan?

Overall company performance on the 2019 SoCalGas Executive Incentive Compensation Plan performance measures, excluding the individual performance measure, was at 171% of target performance. Details of the plan metrics and results are provided below.

2019 EICP PERFORMANCE MEASURES AND RESULTS

Table 3

Overall company performance on the 2019 Shared Services Plan performance measures, excluding the individual performance measure, in which Mr. Folkmann participated prior to his transfer to SDG&E, was at 182% of target performance, as shown below.

Table 4

Overall company performance under the 2019 Sempra Energy annual bonus plans in which Mss. Brown and DeMontigny participated prior to their respective transfers to SoCalGas was at 200% of target performance.

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What adjustments were applied to GAAP earnings to determine EICP Earnings?

Reconciliations of 2019 SoCalGas and Sempra Energy GAAP² earnings to EICP Earnings are provided below.

Table 5

Table 6

What were the Executive Incentive Compensation Plan payouts to the named executive officers for 2019 performance?

As shown above, the overall performance results for annual bonus purposes, excluding individual performance measures where applicable, were 171% of target for the SoCalGas EICP, 182% of target for the Shared Services Plan, and 200% of target for the Sempra Energy plans that Mss. Brown and DeMontigny participated in prior to their transfers to SoCalGas. Based on this performance and its consideration of the contributions of each named executive officer, the SoCalGas Board of Directors approved the payment of the annual bonuses shown in Table 7.

BONUSES PAID TO NAMED EXECUTIVE OFFICERS FOR 2019 PERFORMANCE

Table 7

Note: Mr. Chase was not eligible for a 2019 performance-based annual bonus.

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Long-term equity-based incentives are a large component of each named executive officer’s total target compensation package. See Figure 2 for these percentages. Long-term equity-based incentives are granted to our executives by the Compensation Committee of the Sempra Energy Board of Directors based on the recommendations of the SoCalGas Board of Directors regarding such awards.

What type of equity is granted?

In accordance with our pay-for-performance philosophy, and without regard to special equity awards granted in 2019 as described below, 70% of the 2019 annual LTIP award for each of our named executive officers was in the form of performance-based restricted stock units. The remaining 30% was in the form of service-based restricted stock units. The 2019 performance-based restricted stock units are subject to vesting at the end of three years and the service-based restricted stock units vest ratably over three years.

Why is this type of equity used?

This equity award structure was approved after considering many variables, including alignment with shareholder interests, retention, plan expense, share usage, market trends and feedback from Sempra Energy’s shareholder outreach.

What are the general practices with respect to equity award grants?

Typically, each named executive officer receives one LTIP award annually. In 2019, in connection with their promotions to President, Chief Operating Officer, and Vice President and General Counsel, respectively, Ms. Brown and Messrs. Cho and Barrett also received supplemental annual LTIP awards based on the incremental difference between the target LTIP award value for their new roles compared to their prior roles.

In granting the annual awards:

On the grant date, we calculated the precise number of shares to be granted to each named executive officer by dividing the total target value of each named executive officer’s award by the grant date closing price of Sempra Energy common stock. These target grant values are presented in Table 8 below and differ from the value reported in “Compensation Tables — Summary Compensation Table” and “Compensation Tables — Grants of Plan-Based Awards” with respect to awards based on relative total shareholder return, which are reported in those compensation tables based on a Monte Carlo valuation that is used to reflect the probable outcome of performance conditions and calculate the grant date fair value.

In addition to the annual LTIP awards, special equity awards also may be granted with the approval of the Compensation Committee of the Sempra Energy Board of Directors based on the recommendation of the SoCalGas Board of Directors regarding such awards. Special equity awards are often granted upon the hiring or promotion of executive officers, to award outstanding performance, or to promote retention. In January 2019, Mr. Cho and Ms. Wright each received a special award of service-based restricted stock units valued at $100,000 in order to reward exemplary performance and encourage retention.

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What were the target values of the 2019 annual LTIP awards?

Table 8 illustrates the target grant values of 2019 annual LTIP awards.

TARGET GRANT VALUES FOR 2019

Table 8

Note: Includes the supplemental annual LTIP awards granted to Ms. Brown and Messrs. Barrett and Cho but does not include the special awards granted to Mr. Cho and Ms. Wright.

The actual amounts realized by equity award recipients will depend on future stock price performance and EPS performance and the degree to which these performance measures are achieved. The amounts realized will not necessarily track with the target grant values.

What were the performance goals for the 2019 performance-based restricted stock units?

The 2019 annual LTIP awards included two Sempra Energy performance measures – relative total shareholder return and EPS growth. Fifty percent of the total target award value is linked to Sempra Energy’s relative total shareholder return, with 35% based on Sempra Energy’s total shareholder return relative to the S&P 500 Utilities Index and 15% based on Sempra Energy’s total shareholder return relative to the S&P 500 Index. Twenty percent of the total target award value is linked to Sempra Energy’s EPS growth.

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Each performance-based restricted stock unit represents the right to receive between zero and two shares of Sempra Energy common stock based on Sempra Energy’s three-year cumulative total shareholder return compared with the S&P 500 Index or the S&P 500 Utilities Index, as applicable.

If Sempra Energy’s performance is at target (the 50^th percentile of the applicable index), participants will earn one share for each restricted stock unit. Participants have the opportunity to earn up to two shares for each restricted stock unit for performance above the 50^th percentile. Participants earn a partial share for performance between the 25^th and 50^th percentiles of the applicable index, as shown below.

Table 9

Note: If performance falls between the tiers shown in Table 9, the payout is calculated using linear interpolation.

The 2019 annual LTIP awards also included a performance-based restricted stock unit award linked to relative EPS growth. The award measures the compound annual growth rate (CAGR) of Sempra Energy’s earnings per share for the three-year period ending on December 31, 2021. The payout scale is based on the December 31, 2018 analyst consensus three-year earnings per share growth estimates for the S&P 500 Utilities Index peer companies. The target payout level is based on the 50^th percentile of the analyst consensus estimates and the maximum payout level is based on the 90^th percentile. The awards exclude the impact of stock buybacks not contemplated in the financial plans publicly communicated prior to the grant date of the awards.

If Sempra Energy’s EPS CAGR is at the 50^th percentile of the analyst consensus estimates for the S&P 500 Utilities Index, participants will earn one share for each restricted stock unit. Participants have the opportunity to earn up to two shares for each restricted stock unit for performance above the 50^th percentile. Participants earn a partial share for performance between the 25^th and 50^th percentiles of the analyst consensus estimates, as shown below.

Table 10

Note: If performance falls between the tiers shown in Table 10, the payout is calculated using linear interpolation.

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For purposes of the 2019 annual LTIP award, the calculation of earnings per share may, at the discretion of the Compensation Committee of the Sempra Energy Board of Directors, include the same types of potential adjustments made to EICP Earnings, as described above under “How were the 2019 Executive Incentive Compensation Plan earnings goals determined?”, as well as adjustments related to, among other things, other unusual or non-operating items.

What were the results for the 2017-2019 performance-based restricted stock unit awards?

The performance period for the 2017-2019 award cycle concluded on January 2, 2020 (for the TSR-based awards) and December 31, 2019 (for the EPS-based awards) and were scheduled to vest in 2020.

Sempra Energy’s 2017-2019 relative total shareholder return was at the 59.8^th percentile of the S&P 500 Utilities Index, resulting in vesting at 124.5% of target for the S&P 500 Utilities Index-based award component. Sempra Energy’s relative total shareholder return was at the 66.2^nd percentile of the S&P 500 Index. This award also included a modifier that would increase the award by 20% if Sempra Energy’s total shareholder return for the performance period equaled or exceeded 34% and would decrease the award by 20% if Sempra Energy’s total shareholder return was at or below -11% (this modifier was discontinued and is not included the 2019-2021 award cycle). Sempra Energy’s total shareholder return for the performance period was 61.7%, triggering the modifier and resulting in a payout of 168.6% of target for these awards based on total shareholder return compared to the S&P 500 Index.

The 2017-2019 awards based on Sempra Energy’s EPS growth vested at 200% of target based on EPS growth (as adjusted for LTIP purposes) of 17.3%. The table below shows the predefined adjustments to GAAP EPS used to calculate EPS growth for purposes of the 2017 annual LTIP award. For additional information, see “Compensation Tables — Outstanding Equity Awards at Year-End” and “Compensation Tables — Option Exercises and Stock Vested” below.

Table 11

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Are the named executive officers eligible to participate in other benefit programs?

Our named executive officers also participate in other benefit programs including: (1) health, life insurance and disability plans; (2) retirement and savings plans; and (3) other benefit programs.

What are the details of the health, life insurance and disability plans and other benefits the named executive officers are eligible to receive?

Table 12

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What are the details of the retirement and savings plan benefits the named executive officers are eligible to receive?

Our named executive officers participate in the Sempra Energy Cash Balance Plan and our broad-based, tax-qualified 401(k) Savings Plan. Mr. Lane also participates in the Sempra Energy Supplemental Executive Retirement Plan. Mss. Wright and DeMontigny and Messrs. Cho, Barrett and Folkmann participate in the Cash Balance Restoration Plan, which restores the benefits that would otherwise be provided under the Cash Balance Plan but for Internal Revenue Service limits applicable to tax-qualified pension plans. Officers and certain other key management employees may also elect to participate in a deferred compensation plan. These plans are described in Tables 13 and 14 below.

Table 13

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Table 14

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None of our executive officers has an employment agreement, but our named executive officers have severance pay agreements that include change-in-control features.

Why does the company provide severance agreements?

The Board of Directors believes that severance agreements, which are a prevalent market practice, are effective in:

By mitigating the effect of potential job loss, severance agreements reinforce management continuity, objectivity and focus on shareholder value. This is particularly critical in actual or potential change in control situations. Payments are not required when terminations are for cause.

What benefits do severance agreements provide?

The severance agreements provide for cash payments and the continuation of certain other benefits for a limited period when:

The agreements provide for additional benefits if the termination of employment were to occur within two years following a change in control of Sempra Energy.

In order to receive some of the benefits provided for in the agreement, the executive must, upon termination, enter into a general release in favor of the company and Sempra Energy, provide consulting services for a specified period following the date of termination, and agree to abide by certain contractual confidentiality and non-solicitation obligations.

What does resignation for “good reason” mean?

A resignation for “good reason” may occur if there is an adverse change in scope of duties or in compensation and benefit opportunities or, following a change in control of Sempra Energy, changes in employment location.

These provisions are intended to provide safeguards against arbitrary actions that effectively force an executive to resign.

Do the severance agreements provide for a tax gross-up to offset any taxes incurred by the executive as a result of any severance payment?

The severance agreements do not contain any excise tax gross-up provisions.

What happens to outstanding equity awards upon certain terminations or a change in control?

Awards granted under the Sempra Energy 2013 Long-Term Incentive Plan and the Sempra Energy 2019 Long-Term Incentive Plan are subject to a double trigger change in control vesting provision. This means that awards do not automatically vest upon a change in control. Rather, except under limited circumstances, vesting is only accelerated upon a termination of employment that meets certain conditions following a change in control of Sempra Energy. In the event of a termination of employment other than in connection with a change in control, equity awards are generally forfeited to the extent they are not vested at the time of termination, subject to accelerated vesting or non-forfeiture upon termination in certain specific circumstances. See “Compensation Tables — Severance and Change in Control Benefits” below for additional information.

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What severance benefits did Mr. Chase receive upon his separation from the California utilities?

Mr. Chase separated from the California utilities effective April 2, 2019. In connection with this separation, the California utilities and Mr. Chase entered into a severance agreement and mutual release on April 19, 2019. Pursuant to the agreement, Mr. Chase received (i) a cash payment of $1,363,725 on September 27, 2019; (ii) a cash payment of $771,838 on April 30, 2019, approximately equal to the value of the service-based restricted stock units previously granted to Mr. Chase under Sempra Energy’s long-term incentive plans, which were forfeited upon his termination; (iii) premium payments made directly to Mr. Chase’s insurer to cover continued group health plan coverage through COBRA for up to 18 months; and (iv) up to $50,000 in outplacement services and up to $50,000 in financial advice planning services for 24 months.

SHARE OWNERSHIP REQUIREMENTS

Share ownership requirements for officers have been established to further strengthen the link between executive and shareholder interests. The requirements set minimum levels of Sempra Energy share ownership that our officers must achieve and maintain. For officers, the requirements are:

OFFICER SHARE OWNERSHIP REQUIREMENTS

Table 15

For purposes of the requirements, we include shares owned directly or through our 401(k) Savings Plan. We also include phantom shares of Sempra Energy common stock into which compensation has been deferred, deferred restricted stock units that have vested, unvested service-based restricted stock units and the vested portion of certain in-the-money stock options.

We expect officers to meet these requirements within five years of hire or promotion to an officer-level position and within three years after promotion to a role with a higher share ownership requirement.

All named executive officers are in compliance with these requirements or have additional time within which to comply with any higher-level requirements applicable to them as a result of a promotion.

ANTI-HEDGING AND PLEDGING POLICIES

Pursuant to the Sempra Energy Insider Trading and Information Confidentiality Policy, all employees, including all officers, and all directors of SoCalGas are prohibited from purchasing financial instruments or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of any equity security of Sempra Energy, SoCalGas or any other subsidiary or entity as to which Sempra Energy has majority ownership and control, and are also prohibited from selling “short” any securities of those companies. These prohibitions also apply to family members living in the same household as any such employee, officer or director, as well as entities directly or indirectly controlled by the employee, officer or director.

Officers and directors also are prohibited from pledging shares of Sempra Energy common stock.

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IMPACT OF REGULATORY REQUIREMENTS

Many Internal Revenue Code provisions, Securities and Exchange Commission regulations and accounting rules affect the design of executive pay. They are taken into consideration to create and maintain plans that are intended to comply with these requirements and that our Board of Directors and the Compensation Committee of Sempra Energy’s Board of Directors believe are effective and in the best interests of our company and our shareholders.

Section 162(m) of the Internal Revenue Code places a limit of $1 million on the annual amount of compensation that publicly held companies may deduct for federal income tax purposes for “covered employees.” Prior to the Tax Cuts and Jobs Act of 2017, SoCalGas was not considered “publicly held” for purposes of Section 162(m). As part of the Tax Cuts and Jobs Act of 2017, the definition of companies to which Section 162(m) applies was expanded and SoCalGas became subject to the provisions of Section 162(m). In addition, the definition of covered employees was expanded to generally include all named executive officers.

The SoCalGas Board of Directors believes that tax deductibility is one important factor in designing and evaluating a compensation program. Although we historically maintained certain performance-based incentive plans that originally were intended to permit the payment of compensation deductible under Section 162(m), subject to the limited transition relief rules in the Tax Cuts and Jobs Act of 2017, we are no longer able to take a deduction for any compensation in excess of $1 million that is paid to a covered employee.

Providing salary levels and other compensation that are not fully tax deductible may be required by competitive or other circumstances and may be in the best interests of our shareholders. Accordingly, the Board of Directors may exercise judgment to provide compensation that may not be fully tax deductible by the company.

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COMPENSATION REPORT OF THE BOARD OF DIRECTORS

The Board of Directors of SoCalGas has reviewed and discussed with management of the company the Compensation Discussion and Analysis included in this Information Statement and, based upon that review and discussion, authorized that it be so included.

BOARD OF DIRECTORS

Randall L. Clark

J. Bret Lane

Lisa Larroque Alexander

Trevor I. Mihalik

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COMPENSATION TABLES

Summary Compensation Table

In the table below, we summarize the compensation for the past three years for our named executive officers.