NOTICE OF

ANNUAL MEETING

OF SHAREHOLDERS

Cleco Corporation is furnishing you this proxy statement because you are a holder of Cleco common stock. The Cleco board of directors is soliciting proxies for use at the Cleco annual meeting of shareholders and at any adjournments or postponements of the annual meeting. The annual meeting will be held at 9:00 a.m. Central time on Friday, April 25, 2014, at the Country Inn & Suites by Carlson, 2727 Monroe Highway, Pineville Convention Center, Ft. Randolph Room, Pineville, Louisiana 71360 (please see the map included as Appendix A). The voting stock of Cleco consists of shares of common stock, with each share of common stock entitling its owner to one vote. At the annual meeting, holders of record of Cleco common stock at the close of business on February 28, 2014 will be entitled to vote upon proposals relating to:

The board of directors recommends that you vote “FOR” the election of the three nominees for director, “FOR” the ratification of the Audit Committee’s appointment of Deloitte & Touche LLP as Cleco Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2014, “FOR” the approval of the compensation of Cleco Corporation’s named executive officers, and “FOR” the reapproval of the material terms of the performance goals under the 2010 Long-Term Incentive Compensation Plan.

This proxy statement and the accompanying proxy card are being mailed first on or about March 14, 2014 to record shareholders of Cleco as of the close of business on February 28, 2014.

The enclosed proxy is solicited on behalf of the Cleco board of directors to be voted at the annual meeting. The management of Cleco will solicit proxies by mail, telephone, facsimile, the Internet or overnight delivery. Proxies also may be solicited in advertisements and in person by Cleco officers and employees. Cleco has hired Morrow & Co., LLC (“Morrow”), 470 West Ave, Stamford, CT 06902, to assist in the solicitation of proxies. Morrow’s fee is approximately $10,000 plus expenses. Other than Morrow, no specially engaged solicitors will be retained to solicit proxies. Cleco is responsible for the payment of all expenses of the solicitation, including the cost of preparing and mailing this proxy statement and the reimbursement of brokerage firms and other nominees for their reasonable expenses in forwarding proxy material to beneficial owners of Cleco common stock.

All duly executed proxies will be voted in accordance with their instructions. If no instructions are in an executed proxy, the shares represented by such proxy will be voted at the annual meeting or any adjournments or postponements thereof “FOR” the election of the three nominees for director, “FOR” the ratification of the Audit Committee’s appointment of Deloitte & Touche LLP as Cleco’s independent registered public accounting firm for the fiscal year ending December 31,

2014, “FOR” the approval of the compensation of Cleco’s named executive officers, “FOR” the reapproval of the material terms of the performance goals in the Cleco Corporation 2010 Long-Term Incentive Compensation Plan for purposes of Section 162(m) of the Internal Revenue Code, and in the discretion of the persons named in the proxy on any other business that may properly come before the annual meeting. Management is not aware of any other matters that are likely to be brought before the annual meeting.

A shareholder who gives a proxy may revoke it at any time before the proxy is voted at the annual meeting. To revoke a proxy, a written instrument signed in the same manner as the proxy must be delivered to the corporate secretary of Cleco at or before the annual meeting. Also, a shareholder who attends the annual meeting in person may vote by ballot at the meeting, thereby cancelling his or her proxy.

Cleco’s principal executive offices are located at 2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226, and Cleco’s telephone number is (318) 484-7400. Cleco’s homepage on the Internet is located at www.cleco.com.

Holders of record of outstanding common stock as of the close of business on February 28, 2014 are entitled to receive notice of and to vote at the annual meeting. As of February 28, 2014, there were 61,040,405 shares of Cleco common stock outstanding. As of February 28, 2014, all officers and directors of Cleco, as a group, beneficially owned 1.55% of the outstanding shares of Cleco common stock.

This proxy provides you with the opportunity to specify your approval or disapproval of, or abstention with respect to, the following proposals:

Generally, under Louisiana law and Cleco’s Amended and Restated Articles of Incorporation and Bylaws, an abstention by a shareholder who is either present in person at the annual meeting or represented by proxy is not a vote “cast” and is counted neither “for” nor “against” the matter subject to the abstention. Under Louisiana law and Cleco’s Bylaws, a quorum is based upon the number of outstanding shares of voting stock, including shares relating to abstentions. Shares registered in the names of brokers or other “street name” nominees for which proxies are voted on some but not all matters will be considered to be present at the meeting for quorum purposes, but will be considered to be voted only as to those matters actually voted and will not be considered as voting for any purpose as to the matters to which no vote is indicated (commonly referred to as “broker non-votes”). The New York Stock Exchange (“NYSE”) precludes brokers from exercising voting discretion on certain proposals, including the election of directors, executive compensation proposals and other “non-routine” proposals. The only “routine”

proposal that will be voted on at the 2014 annual meeting, and for which brokers may exercise discretion, is Proposal 2.

What are the voting requirements to elect directors and approve each of the proposals discussed in this Proxy Statement?

Quorum. We will have a quorum and will be able to conduct the business of the annual meeting if the holders of a majority of the votes that shareholders are entitled to cast are present at the meeting, either in person or by proxy. Abstentions and “broker non-votes” are counted as present for purposes of determining a quorum.

Votes Required for Proposals. The following proportion of votes is required to elect directors and adopt the other proposals:

Directors. Election of directors is by plurality of the voting stock, with each holder of Cleco common stock being able to cast as many votes as equal the number of such holder’s shares of common stock multiplied by the number of directors to be elected. Each holder of Cleco common stock may cumulate all or any part of these votes for one or more of the nominees. The three persons who receive the most votes will be elected as directors. Abstentions and broker non-votes are treated as votes not cast and will have no effect on the election of directors.

Independent Registered Public Accounting Firm. To ratify the appointment of the Company’s independent registered public accounting firm, a majority of votes cast must vote in favor of this proposal. Abstentions and broker non-votes will have no effect on the outcome of this proposal.

Advisory Vote to Approve Named Executive Officer Compensation. The approval of the non-binding vote on executive compensation requires the approval of a majority of votes cast. Abstentions and broker non-votes will have no effect on the outcome of this proposal. The outcome of this vote is advisory in nature and will not be binding on Cleco or Cleco’s board of directors.

Approval of Material Terms of Performance Goals in 2010 Long-Term Incentive Compensation Plan for purposes of Section 162(m) of the Internal Revenue Code. The approval of this proposal requires the approval of a majority of the votes cast. Abstentions and broker non-votes are treated as votes not cast and will have no effect on the outcome of this proposal.

The proxy enclosed for record holders of voting stock is for the number of shares registered in your name with Cleco, together with any additional full shares held in your name in Cleco’s Dividend Reinvestment Plan.

If you are an employee of Cleco and participate in the Cleco Savings and Investment Plan (“401(k) Savings Plan”), you may vote the number of shares of Cleco common stock equivalent to your interest in the Cleco common stock fund of the 401(k) Savings Plan as of the close of business on February 28, 2014, the record date for the annual meeting. Additionally, if you are an employee of Cleco and participate in the Cleco Employee Stock Purchase Plan (“Stock Purchase Plan”), you may vote the number of shares of Cleco common stock purchased with your payroll deductions as of the record date. In any case, complete and return the proxy card being mailed with this proxy statement, or follow the directions on the proxy card to vote through the Internet. The trustee under the 401(k) Savings Plan and/or the custodian under the Stock Purchase Plan will vote the shares allocated to your account(s) according to your instructions. If you do not send instructions within the time required, the share equivalents credited to your account(s) will not be voted.

Please call Cleco’s Office of Shareholder Assistance at 1-800-253-2652 with any questions relating to the proposals to be considered at the annual meeting.

Cleco’s Bylaws provide for the division of Cleco’s board of directors into three classes: Class I, Class II and Class III, with each class consisting, as nearly as possible, of one-third of the number of directors constituting the entire board. Cleco’s board of directors currently has a total of nine directors: three are in Class I, three are in Class II and three are in Class III. The term of each directorship is three years. The terms of the three classes are staggered in a manner so that only one class is elected by the shareholders annually. The three Class II director positions are proposed for election this year to serve as members of Cleco’s board of directors until the annual meeting of shareholders in 2017, or until their successors are elected and qualified.

Although Cleco’s board is currently divided into three classes as described above, on October 25, 2013, the board approved an amendment to the Company’s Bylaws to declassify the board to implement the annual election of all directors. Under the terms of the Bylaws, this amendment will not become effective until October 25, 2014, so the Class II directors nominated for election this year will serve a three-year term. The Class III directors, who will be nominated for re-election in 2015, will be elected for a one-year term, and the Class I directors nominated for election in 2016 will be elected for a one-year term. All directors will be elected annually beginning with the 2017 annual meeting.

The persons named in the accompanying proxy may act with discretionary authority to cumulate the votes attributable to shares of Cleco common stock represented by the proxy and to vote for other nominees upon the unavailability of a named nominee, although management is not aware of any circumstance likely to render any of the named nominees unavailable for election. Unless a shareholder specifies otherwise, the persons named in the accompanying proxy intend to vote in favor of the nominees listed below. The three persons who receive the most votes cast will be elected as directors.

All of the nominees listed below currently serve as directors of Cleco. Directors who are members of Classes I and III, who are continuing as directors at this time and whose terms of office expire in 2016 and 2015, respectively, are named below following the information concerning the three nominees for election as Class II directors.

Cleco’s board of directors unanimously has approved the nomination of the three nominees for Class II director and recommends that you vote “FOR” the election of the three nominees for Class II director.

Cleco’s board of directors has delegated some of its authority to four committees. These are the Audit Committee, the Compensation Committee, the Finance Committee and the Nominating/Governance Committee. The members of those committees are identified, as appropriate, under “—Class I Directors,” “—Class II Directors” and “—Class III Directors” above. In accordance with current listing standards of the NYSE, Cleco’s board of directors has adopted categorical standards to assist it in making determinations of director independence that are required by the NYSE. These categorical standards are posted on Cleco’s web site at www.cleco.com; Investors—Governance Guidelines—Independence. A copy of the standards is also available free of charge by request sent to: Shareholder Services, Cleco, P.O. Box 5000, Pineville, LA 71361-5000. The board of directors has determined that all of its directors, except Mr. Williamson, who is the president and CEO of Cleco, meet the categorical standards and are independent within the meaning of the current listing standards of the NYSE.

The Audit Committee selects Cleco’s independent registered public accounting firm, reviews the scope of audits, reviews and recommends to Cleco’s board of directors financial reporting and accounting practices, and reviews Cleco’s procedures for internal auditing and the adequacy of its system of internal accounting controls. On a quarterly basis, the Audit Committee reviews activity reported through Cleco’s Ethics Helpline, which provides a means for employees to anonymously seek guidance or report allegations of misconduct. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. During 2013, the Audit Committee held five meetings, one of which was a formal telephone meeting.

The Compensation Committee approves, or in some cases recommends to Cleco’s board of directors, remuneration arrangements and compensation plans involving Cleco’s officers and employees and administers the annual incentive compensation program and the granting of stock options, restricted stock and other awards to eligible employees under Cleco’s Long-Term Incentive Compensation Plan (“LTIP”), which references the 2010 Long-Term Incentive Compensation Plan which became effective January 1, 2010. In 2013, the Compensation Committee held five meetings, one of which was a formal telephone meeting.

The Finance Committee reviews and recommends to the board of directors actions related to Cleco’s dividend and investment policies, corporate financing plans and major financial undertakings. During 2013, the Finance Committee held five meetings.

The Nominating/Governance Committee considers and makes recommendations to the board of directors with respect to the size and composition of the board, potential candidates for membership on the board, compensation of directors, the effectiveness, structure and operation of the board, nominees for officers of Cleco and its affiliates, and changes to Cleco’s Corporate Governance Guidelines. In 2013, the Nominating/Governance Committee held four meetings.

Each of the Audit Committee, Compensation Committee, Finance Committee and Nominating/Governance Committee operate under respective written charters adopted by the board of directors, copies of which are posted on Cleco’s web site at www.cleco.com; Investors—Board Committees. A copy of each charter is also available free of charge by request sent to: Shareholder Services, Cleco, P.O. Box 5000, Pineville, LA 71361-5000.

Cleco’s board of directors held five regular meetings and eight special meetings, six of which were formal telephone meetings, during 2013. In months when a formal meeting is not held, members of Cleco’s board of directors may be provided with written reports regarding the operations of Cleco, may hold informal telephone conference meetings if business needs dictate, and also are consulted informally from time to time with respect to pending business. When necessary, special meetings, including formal telephone meetings, are called as official board meetings to deal with specific action items. Cleco’s Corporate Governance Guidelines provide that executive sessions of non-management directors will be scheduled at the conclusion of all official in-person meetings of the board and its committees, although non-management directors may meet in executive session at any time. During 2013, all directors attended at least 95% of the total number of formal meetings of Cleco’s board of directors and of the committees of Cleco’s board of directors on which such directors served. Directors also are expected to attend each annual meeting of shareholders. The 2013 annual meeting of shareholders was attended by all directors serving at that time.

During 2013, Mr. Garrett served as the non-executive chairman of the board of directors. On an annual basis, the board, led by the Nominating/Governance Committee, will evaluate the board leadership structure to ensure that it remains appropriate for the Company and its shareholders given the then-current circumstances of the Company. We recognize that different board leadership structures may be appropriate for

companies with different histories and cultures, depending on their circumstances. We believe the appropriate structure for Cleco’s board may also change, depending on various factors. The board believes the separation of the two roles provided the appropriate structure in 2013 given the Company’s circumstances during the year.

Cleco’s Corporate Governance Guidelines were adopted by the board of directors in January 2002. These guidelines are intended to complement Cleco’s Amended and Restated Articles of Incorporation and Bylaws and address, among other things, the mission, the structure and the operation of the board of directors. The guidelines may change from time to time as the board of directors may determine such change to be in the best

interest of Cleco and its shareholders. The Corporate Governance Guidelines were last revised in October 2013 and are posted on Cleco’s web site at www.cleco.com; Investors—Governance Guidelines. The Corporate Governance Guidelines are also available free of charge by request sent to: Shareholder Services, Cleco, P.O. Box 5000, Pineville, LA 71361-5000.

Cleco has adopted a Code of Conduct that applies to its principal executive officer, principal financial officer, principal accounting officer and treasurer. Cleco also has adopted Ethics & Business Standards applicable to all employees and the board of directors. In addition, the board of directors has adopted Conflicts of Interest and Related Policies to prohibit certain conduct and to reflect the expectation of the board of directors that its members engage in and promote honest and ethical conduct in carrying out their duties and responsibilities, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships and corporate opportunities. Under the Conflicts of Interest and Related Policies, which were last revised in April 2007, Cleco considers transactions that are reportable under the Securities and Exchange Commission’s (“SEC”) rules for transactions with related parties to be conflicts of interest and prohibits them. Any request, waiver, interpretation or other administration of the policy shall be referred to the Nominating/Governance Committee. Any recommendations by the Nominating/Governance Committee to implement a waiver shall be referred to the full board of directors for a final determination. The Code of Conduct, Ethics & Business Standards, and Conflicts of Interest and Related Policies are posted on Cleco’s web site at www.cleco.com; Investors—Codes of Conduct. Each of these documents is also available free of charge by request sent to: Shareholder Services, Cleco, P.O. Box 5000, Pineville, LA 71361-5000.

As previously disclosed in a Current Report on Form 8-K filed by the Company on January 10, 2013, Mr. Robert T. Ratcliff, Sr. resigned from the board on January 9, 2013. Mr. Ratcliff resigned to enable The Ratcliff Construction Company (“Ratcliff Construction”) to compete for work with the Company to renovate certain facilities owned by the Company. Mr. Ratcliff is the chairman and CEO of Ratcliff Construction, a company in Alexandria, Louisiana that is primarily engaged in the design and construction of industrial, commercial and governmental facilities. His son, Robert T. Ratcliff, Jr., is the president of Ratcliff Construction. Cleco and Mr. Ratcliff agreed that Mr. Ratcliff should resign from the board before Ratcliff Construction would be allowed to compete for this business with Cleco.

In March 2013, Cleco and Ratcliff Construction executed agreements for Ratcliff Construction to serve as the construction manager acting as contractor for the renovation of certain Cleco facilities located in Pineville,

Louisiana (collectively, the “Pineville Agreement”). The Pineville Agreement is a guaranteed maximum price (“GMP”) contract, which provides that Ratcliff Construction will be reimbursed for the actual cost of the work and will be paid a contractor’s fee of nine percent of the cost of the work. The cost of the work plus the contractor’s fee cannot exceed the GMP of $12,809,422 except through a change order signed by both parties. Cleco and Ratcliff Construction signed an agreement in September 2013 for the partial demolition of an existing parking garage and the erection of a new parking garage at Cleco’s headquarters in Pineville. The GMP for the foundation erection of the precast parking structure and design and installation of the elevator is $3,536,911. The remaining work related to the parking garage is also being performed under a GMP arrangement which Cleco estimates to be approximately $3,092,629. Renovation of other Cleco facilities statewide is being performed under a separate agreement between Cleco and Ratcliff Construction, the total cost of which is estimated to be $4,631,500.

Because Mr. Ratcliff was a director during the first nine days of 2013, the Company is disclosing the agreements described above with Ratcliff Construction as a related party transaction as required by Regulation S-K. Because the Company’s Conflicts of Interest and Related Policies provides that a transaction that must be disclosed under Item 404 of Regulation S-K constitutes a conflict of interest, the board of directors was required to consider a waiver of the Conflicts of Interest and Related Policies. Upon consideration, the board waived the Conflicts of Interest and Related Policies in connection with the Company’s entry into the agreements with Ratcliff Construction described above. In considering this matter, the board noted that Mr. Ratcliff had resigned as a director in order to avoid even the appearance of a conflict. Further, it concluded that Ratcliff Construction was the most qualified local company to perform these services, that the terms of the agreements would be consistent with industry practice and were negotiated by the Company with assistance from third parties with industry experience, and that entry into these agreements was in the best interests of the Company. Finally, the board concluded that the negotiations with Ratcliff Construction were arms-length and that Ratcliff Construction did not receive any preference from the Company as a result of Mr. Ratcliff’s prior service on the board of directors.

Risk can take many forms, such as operating risk, financial risk, regulatory risk, environmental risk and reputational risk. See Cleco Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (“2013 Form 10-K”), Item 1A, “Risk Factors” and Part II, Item 7, “Management Discussions and Analysis of Financial Condition and Results of Operations—Results of Operations—Cleco Power—Significant Factors Affecting Cleco Power” and “—Midstream—Significant Factors Affecting Midstream,” for additional information on the different forms of risk relevant to the Company.

The board of directors has ultimate responsibility for the Company’s risk oversight process, which is designed to support the achievement of organizational objectives and set forth strategic initiatives to improve Cleco’s long-term performance and enhance shareholder value. The Audit Committee and the Finance Committee have been delegated primary responsibility for general business risks by the board of directors. The Compensation Committee has been delegated primary responsibility for compensation risk management. These committees are responsible for evaluating the risks outlined in their respective charters and for reporting their findings, any required actions and recommendations to the full board of directors on a quarterly basis or more frequently, as necessary. Relevant excerpts from the charters are as follows:

Audit Committee – “Discuss policies with respect to risk assessment and risk management as those policies relate to financial reporting and fraud, and receive reports from management, the internal auditors or the independent auditors on suspected fraudulent activities.”

Finance Committee – “Review corporate risk exposure and risk management policies and practice, including a review of compliance with all debt covenants and regulatory orders pertaining to financing.”

Compensation Committee – “Monitor the executive officer compensation and benefit programs to determine if they are . . . creating proper incentives in light of the Company’s risk factors.”

Management has reported to the board of directors that it believes that the processes and information that support the Audit and Finance Committees’ ability to meet their oversight responsibilities are comprehensive and adequate. The following is a summary of the procedures that form the basis of that assessment.

Audit Committee

The Audit Committee directly receives various written and verbal reports from members of management, the Company’s internal auditors and the Company’s independent registered public accounting firm. Members of management who make regular reports to the Audit Committee are the CFO, the Chief Accounting Officer (“CAO”), the General Manager of Internal Audit (“GMIA”) and the General Counsel.

Management, the Company’s internal auditors and the Company’s independent registered public accounting firm have access to the Audit Committee through its chairman at any time as deemed necessary to report significant risks or issues identified between the regular quarterly face-to-face meetings with the Audit Committee. The Audit Committee provides guidance to management, as it deems appropriate, on methods for mitigating significant risks and requests feedback from management on the status and effectiveness of mitigation efforts.

Finance Committee

The Finance Committee receives written and verbal reports from members of management regarding the commercial and financial risks of the business. Specifically, the board of directors receives regular written reports on the following topics in conjunction with each quarterly meeting:

On an annual basis, the Finance Committee reviews and approves the operating plan and the capital expenditure plan for the upcoming year. The board of directors is presented with the key assumptions supporting the operating and capital plan along with key financial metrics at both the October and December meetings. In addition, management prepares a five-year financial plan and reviews it with the Finance Committee at least annually, including the review completed with the full board of directors at the Company’s annual strategy meeting. Also, on an annual basis, the Finance Committee is provided an update on the Company’s insurance program and the outlook for the insurance market.

Compensation Committee

The reports, analyses and decisions made by the Compensation Committee with regard to executive compensation and compensation risk assessment can be found in our CD&A beginning on page 17 of this proxy statement. As outlined in the CD&A, the Company believes it has a balanced approach to compensation design and risk that is consistent with the long-term interests of Cleco and its shareholders.

Cleco’s Corporate Governance Guidelines set forth Cleco’s method of selecting director nominees and provide for annual evaluations of the board and the board committees as a whole. In connection with these evaluations, which were completed for the first time in 2004, Cleco’s board of directors identified, and the Nominating/Governance Committee compiled, attributes of the board’s incumbent members believed to contribute to the work of the board and its committees, including leadership, accomplishments, skills, diversity, integrity and commitment to board duties. The Nominating/Governance Committee does not have a formal policy with respect to diversity, but its charter defines diversity to include gender, race, national origin, education, professional experience and differences in viewpoint and skills. The board of directors and the Nominating/Governance Committee believe that it is essential that board members represent diverse viewpoints to function most effectively.

The Nominating/Governance Committee is responsible for developing and continuing to update the list of attributes, subject to approval by the full board of directors, for use in identifying, evaluating and selecting qualified candidates to serve on the board of directors. The Nominating/Governance Committee, in accordance with Cleco’s Corporate Governance Guidelines, seeks to create a board of directors that is strong in its collective knowledge and has a diversity of skills and experience. Out of over 30 board member skill sets listed in the annual evaluation completed for 2013, the following were rated by a majority of the board of directors as “very important” in considering future members of the board of directors: (1) current or prior operating and profit-and-loss experience; (2) leadership and managerial skills; (3) planning skills and a good business background; (4) practical, mature and sound business judgment; (5) initiative; (6) high moral and ethical standards; (7) high performance standards; (8) inquisitive and objective perspective; instinctive curiosity; and (9) a skeptical/inquiring mind with a willingness to ask tough questions.

When a position on the board of directors becomes vacant, or if the number of members on the board of directors is being increased, the Nominating/Governance Committee will review the attributes of the incumbent board members and determine the attributes that, if possessed by the new board member, would likely result in the most significant contribution to the board of directors. The Nominating/Governance Committee also will consider the skills and experience of those directors approaching retirement to ensure Cleco maintains a diverse, strong and

effective board of directors. The Nominating/Governance Committee may recommend hiring a search firm to assist in identifying qualified candidates with the desired attributes. In connection with recent searches for new directors, the Nominating/Governance Committee and the board of directors updated the list of desired qualifications for candidates to include: (1) experience as a CEO of a public company; (2) experience with electric utilities, energy companies, regulated industries and/or capital intensive industries; (3) experience with major strategic initiatives; (4) diversity, including race or gender; and (5) financial/audit committee experience. Persons recommended to the Nominating/Governance Committee for consideration as nominees for a vacant or new board position will then be evaluated with respect to the attributes determined by the Nominating/Governance Committee to be optimal for the vacant or new position. Following the evaluation, which may involve interviews or other procedures the Nominating/Governance Committee deems appropriate, the Nominating/Governance Committee will make a recommendation to the board of directors regarding a candidate either to be nominated at the next annual meeting of shareholders or elected by the board between such meetings. Each of Messrs. Kruger, Scott and Stewart and Ms. Bailey were elected through this process by the board of directors.

Recommendations for potential nominees may come from any source, including members of the board of directors, shareholders, self-recommendations, members of the communities Cleco serves or search firms. All persons recommended for a vacant or new board position will be given equal consideration regardless of the source of the recommendation. Cleco’s Nominating/Governance Committee did not receive from any shareholder any nominees for election as director at the 2014 annual meeting of shareholders.

Any person wishing to make a recommendation for a person to be considered by the Nominating/Governance Committee pursuant to the process described above as a potential nominee to the board of directors should direct the recommendation to the chairman of the Nominating/Governance Committee in care of Cleco’s corporate secretary. However, Cleco is not obligated to nominate any nominee that is recommended to the Nominating/Governance Committee following these processes. Separately, Cleco’s Bylaws contain certain provisions concerning nomination of a director by a shareholder, which are described below under the caption “Proposals by Shareholders” beginning on page 57.

The following table describes the Cleco common stock beneficially owned by Cleco directors and nominees, the executive officers named in the Summary Compensation Table below, and the directors and executive officers as a group. Shares of stock are “beneficially owned” by a person if the person directly or indirectly has or shares the power to vote or dispose of the shares, regardless of whether the person has any economic interest in the shares. A person also beneficially owns shares as to which the person has the right to acquire beneficial ownership within

60 days, as in the case of the stock options set forth under the “Options Exercisable Within 60 Days” column in the following table.

All information in the table is as of February 20, 2014, and is based upon information supplied by the directors and officers. Unless otherwise indicated in the footnotes and subject to community property laws where applicable, each of the shareholders named in the table has sole voting and investment power with respect to the shares indicated as beneficially owned.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires Cleco’s executive officers and directors, and persons who beneficially own more than 10% of a registered class of Cleco’s equity securities, to file with the SEC and the NYSE initial reports of ownership and reports of changes in ownership of Cleco’s equity securities. To

Cleco’s knowledge, based solely on review of the copies of such reports furnished to Cleco, for the fiscal year ended December 31, 2013, all Section 16(a) filing requirements applicable to its executive officers, directors and greater-than-10% shareholders were satisfied.

Cleco’s executive compensation and benefits philosophy is to provide market-based programs that pay or award our executive officers at levels approximating the competitive market. We believe in paying above the market for superior performance and below the market for underperformance unless extraordinary circumstances compel us otherwise. Our overall executive compensation design philosophy reflects our Compensation Committee’s desire to align management’s actions with the interests of our shareholders. Our executive benefits philosophy is to offer plans and programs that allow us to consistently attract and retain executive talent.

2013 Results and Our Compensation Philosophy

Cleco had a successful 2013. We met or exceeded all of our financial goals and completed or made significant progress toward completion of several strategic initiatives. Highlights for 2013 include:

As a direct result of our success in 2013, performance on most of our incentive measures exceeded our targets. Performance related to each of these measures is explained further in this CD&A on pages 22 through 24. Due to strong annual EPS and three-year TSR performance (the primary performance metrics in our annual and long-term incentive plans), actual incentive compensation for our named executive officers – 2013 cash incentive and long-term incentive award for the 2011 to 2013 performance cycle – exceeded each plan’s target by 10.0% and

63.0%, respectively. Our Compensation Committee, in reviewing and approving the 2013 award levels, concluded that this attained compensation level was consistent with our performance results described above, as well as with progress made on our major strategic initiatives. Overall, we believe the Company’s executive compensation program is working as intended, remains consistent with practices within our Comparator Group, as defined on page 20 under “Market Data and Comparator Group,” and is aligned with shareholder outcomes.

To align our compensation practices with our philosophy of providing competitive market-based programs that allow for pay opportunities above the market for superior performance and below the market for underperformance, we seek to provide our executive officers with total compensation opportunities that:

Pay for Performance

We define performance-based pay as pay that is dependent upon our performance against pre-established measures and/or our performance compared to the performance of companies in our Proxy Peer Group, as defined under “Market Data and Comparator Group” on page 20. The pie charts below demonstrate our commitment to the delivery of a pay for performance compensation program, as the only fixed element of our ongoing compensation program is base salary. Our annual and long-term incentive plans are fully performance-based. Time-based restricted stock is occasionally awarded in special circumstances to address retention concerns, attract external new hires or reward outstanding individual performance.

Compensation Governance

Pay Elements

Our Compensation Committee targets total compensation (made up of the elements described below) to be competitive with the median of our Comparator Group as defined on page 20, but individual positioning

may vary above or below the median depending on each executive’s experience, performance and contribution to the Company. For 2013, we believe that we accomplished our philosophy through the following compensation and benefit components:

The Executive Compensation Process

Our Compensation Committee

Our Compensation Committee met five times during 2013, including one formal telephone meeting. Our Compensation Committee’s meetings in January, July, October and December are devoted to issues analysis, market analysis and performance tracking of our compensation and benefit programs. Our CEO and senior vice president, corporate services & information technology attend our Compensation Committee’s meetings on behalf of management, but do not participate in the Compensation Committee’s executive sessions.

Our Compensation Committee’s responsibilities, which are more fully described in our Compensation Committee’s charter, include:

The Compensation Consultant

In 2010, our Compensation Committee engaged Frederic W. Cook & Co., Inc. (“Cook & Co.”) to consult on matters concerning executive officers’ compensation and benefits. All executive compensation adjustments and award calculations for 2013 were reviewed by Cook & Co. on behalf of our Compensation Committee. Cook & Co. acted at the direction of our Compensation Committee and was independent of management. Our Compensation Committee determined Cook & Co.’s ongoing engagement activities, and Cook & Co. endeavored to keep our Compensation Committee informed of executive officers’ compensation trends and regulatory compliance developments throughout 2013. Cook & Co. was responsible for providing market data and analysis of 2013 compensation and benefits for our executive officers.

Our Compensation Committee has assessed the independence of Cook & Co. pursuant to SEC rules and concluded that its work did not raise any conflict of interest that would prevent Cook & Co. from independently representing our Compensation Committee.

The Role of the Chief Executive Officer

Our CEO annually reviews the performance of our named executives (other than himself) and makes recommendations to our Compensation Committee regarding base salary adjustments, cash incentives and long-term incentive awards. Our CEO participates in meetings of our

Compensation Committee to discuss executive compensation, including measures and performance targets, but is subsequently excused to allow the independent members of our Compensation Committee to meet in executive session. For 2013, the measures and performance targets also were reviewed by Cook & Co. prior to adoption by our Compensation Committee.

Our Compensation Committee also has delegated limited authority to our CEO to extend employment offers to executive officers at the level of vice president or lower. The CEO may make such offers without prior approval of the board of directors provided no compensation component falls outside our Compensation Committee’s approved policy limits as described on pages 21 through 27. Our Compensation Committee still approves any grant of Cleco common stock or other equity award made pursuant to this delegation of authority prior to issuance of the grant. No such employment offers were made under this delegation of authority during 2013.

Shareholder Advisory Vote

We provide an annual shareholder advisory vote on the compensation of Cleco’s named executive officers as described in this proxy statement. In 2013, shareholders strongly supported (approximately 96% of voting stock represented at the 2013 annual meeting voted for) our “say-on-pay” proposal. This “say-on-pay” vote is not binding on Cleco, our Compensation Committee or our board of directors; however, our board of directors and our Compensation Committee review the voting results and consider them, along with any specific insight gained from the shareholders of Cleco and other information relating to the shareholder vote on this proposal, when making decisions regarding executive compensation. For more information, see “Proposal Number 3—Consideration of an Advisory Vote to Approve the Compensation of Cleco’s Named Executive Officers” on page 51.

Market Data and Comparator Group

Our Compensation Committee believes that compensation and benefits for our executive officers who successfully enhance shareholder value should be competitive with the compensation and benefits offered by similar publicly held companies in our industry to attract and retain the high quality executive talent required by the Company. Our Compensation Committee examines our executive officers’ compensation against comparable positions using publicly available proxy data for a group of 19 industry peers (the “Proxy Peer Group”) and utility industry survey data to help design and benchmark our executive officer compensation. This evaluation includes base salary, annual and long-term incentive plan targets, other potential equity awards and target total compensation. The Proxy Peer Group, approved by the Compensation Committee in July 2012 and 2013, is also used to track comparable performance of our long-term incentive plan. The combination of the Proxy Peer Group and the utility industry survey data is referred to as “our Comparator Group.”

The Compensation Committee periodically examines the Proxy Peer Group to ensure that peer companies continue to meet the criteria of our model portfolio. The general criteria examined in developing our Proxy Peer Group include:

In setting executive compensation levels in 2013, our Compensation Committee also used utility industry survey data from the 2012 Towers Watson Energy Services Executive Compensation Database. Survey data provides a broader energy industry perspective. This survey data is used in

conjunction with the Proxy Peer Group data as a competitive market reference point for the Compensation Committee to consider in determining pay levels.

Base Salary

We strive to set base salary levels for our executive officers as a group, including the named executive officers, at a level approximating +/-15% of our Comparator Group market median for base pay. For 2013, actual base salaries for our executive officers as a group were 97% of the Comparator Group median.

In 2013, there were two promotion-related increases and base increases for the other named executive officers. Typically, the amount of a base

salary increase is based on an appraisal of individual performance by the named executive officer’s supervisor and, in the case of our CEO, by our board of directors, as well as position-specific market data provided by Cook & Co. to our Compensation Committee and the terms of his employment agreement.

Base salaries for our named executive officers in 2013 are shown in the table below.

Our Compensation Committee approved these adjustments based on the following:

Annual Cash Incentive

We maintain an annual, performance-based cash incentive plan called the Cleco Corporation Pay for Performance Plan or PFP Plan. The PFP Plan became effective January 1, 2012, and it superseded the Company’s Annual Incentive Plan (“AIP”) and Employee Incentive Plan. The PFP Plan applies to all regular, full-time employees, and it includes weighting for corporate and individual performance goals. Our executive officers have more of their PFP Plan targets weighted on corporate goals, since they have more influence over corporate level results. As mentioned, the Compensation Committee targets PFP Plan award opportunities for executive officers to approximate the median of the annual cash incentive target award of our Comparator Group. Payouts are capped at 200% of target. The table below presents the target PFP Plan opportunities for the named executive officers in 2013:

For Messrs. Williamson, Miller, Olagues and Hoefling and Ms. Miller, the 2013 PFP Plan award was based entirely on the corporate performance measures described below. The 2013 PFP Plan award for Mr. Crump was based 80% on the corporate performance measures outlined below and 20% on the achievement of individual goals established in his performance plan. The 2013 PFP Plan corporate performance measures consisted of the six metrics listed below (weighting):

• Quality Performance Factor (10%)

In establishing the 2013 PFP Plan corporate metrics, the Compensation Committee believed it was most important to reward senior executives for the overall financial performance of the Company, and therefore weighted EPS most heavily at 70%. In addition, to continually focus the executives and the entire organization on the importance of safety, system reliability and generation fleet availability, 20% of the bonus opportunity attributable to the corporate measures was contingent on safety and operational performance. Finally, in 2011, the Compensation Committee established the “Quality Performance Factor” with a 10% weighting. This factor permits the Compensation Committee to assess how performance was achieved during the year and to adjust the payout using a number of subjective factors based on its discretion and management input.

In December of each fiscal year, our CEO recommends the PFP Plan financial performance and other measures to our Compensation Committee for the upcoming year. Based on our historical performance relative to target and our relative historical performance versus our Comparator Group, our Compensation Committee reviews, revises as appropriate and approves the PFP Plan measures for the upcoming year.

Our Compensation Committee may adjust the PFP Plan targets to more closely align incentive targets and awards with investor concerns.

Our Compensation Committee also has the authority to adjust the amount of any individual PFP Plan award with respect to the total award or the corporate or individual component of the award upon recommendation by our CEO. Adjustments for PFP Plan participants, except for our executives, may be made by the CEO in his discretion. Adjustments are based on our annual performance review process. For 2013, our Compensation Committee, upon recommendation from our CEO, determined that the PFP Plan awards for Messrs. Miller, Olagues and Hoefling and Ms. Miller should be based entirely on corporate performance. The 2012 PFP awards for Messrs. Olagues and Hoefling and Ms. Miller were based 80% on the corporate performance measures for 2012 and 20% on the achievement of individual goals established in their performance plans. The 2012 PFP award for Mr. Miller was based 70% on the corporate performance measures for 2012 and 30% on the achievement of individual goals established in his performance plan. No other adjustments were made to the 2013 PFP Plan awards for our named executive officers, including Mr. Williamson.

Additional details on the 2013 PFP Plan measures and target levels regarding our named executives may be found on page 32, “Non-Equity Incentive Plan Compensation” and page 33, “Estimated Future Payments under Non-Equity Incentive Plan Awards (PFP Plan).”

Equity Incentives

Our executive officers and other key employees are eligible to receive performance-based and other grants of restricted stock, common stock equivalent units (“CEUs”), stock options and stock appreciation rights. These grants are made pursuant to our LTIP. A grant gives the recipient the right to receive or purchase shares of our common stock under specified circumstances or to receive cash awards based on the appreciation of our common stock price or the achievement of pre-established long-term performance goals. Taxes on equity incentives awarded pursuant to our LTIP are borne by the executive officer.

Performance-Based Restricted Stock

Historically, our primary equity incentive tool has been an annual award of performance-based restricted stock. We commonly refer to these awards as the “LTIP award.”

2013 LTIP Award

Each LTIP award performance cycle is three years. For 2013, the performance cycle covers January 1, 2013 to December 31, 2015. The LTIP award performance measure is TSR. The LTIP has a minimum award of 0% of target and a maximum possible award of 200%. The performance measure used for the three-year LTIP performance cycle is Cleco’s TSR relative to the Proxy Peer Group (see page 20 for details). The table below presents the TSR performance and payout range established to determine payouts for the 2013 LTIP award:

Each year the Compensation Committee approves an LTIP award to eligible executives. The target number of LTIP shares is a function of the grant date value, set as a percentage of base salary, divided by the price of our stock on the date of grant calculated as the average of the high and low price of our stock on the date of grant rounded to the nearest eighth.

Example: Base Salary = $100,000; LTIP Value = $50,000 (50% of base salary); Stock Price = $50/share; Target LTIP Shares = 1,000 shares

Each executive officer’s target LTIP award level is set, so in combination with other pay elements, it will deliver a total compensation opportunity that approximates the median of our Comparator Group. The chart below details the targeted opportunity for each of the named executives expressed as a percentage of base salary:

2011 – 2013 LTIP Award

Our Compensation Committee approved an overall award level of 163% of target for the LTIP performance cycle that ended on December 31, 2013. This award level represents our TSR performance in the 81.3^rd percentile of the Proxy Peer Group as defined above under “The Proxy Peer Group Companies” for the three-year period ended December 31,

2013. Dividends accrued during the three-year period ended December 31, 2013 were paid to the extent the award was earned up to an award level of 100%. Dividends were not paid on the opportunity shares awarded for performance above 100%.

The table below summarizes our recent LTIP award history:

TSR for purposes of the 2011 – 2013 LTIP performance cycle was calculated using the quarterly return method.

Our Compensation Committee may adjust our LTIP award if it determines that circumstances warrant. Any adjustment applies to all participants equally. No such adjustment was made for the LTIP award approved for the cycle ended December 31, 2013. There are no provisions in the LTIP for individual award adjustment. Details on how our LTIP grants and awards are calculated are included on page 31, “Stock Awards.”

Time-Based Restricted Stock

Time-based restricted stock typically is not an element of our annual long-term incentive award opportunity. The Compensation Committee will and has awarded grants of time-based restricted stock that are typically associated with mid-year promotions, at the time of an external executive hiring or to reward our named executive officers for extraordinary performance above that which can be rewarded through the PFP Plan. Our Compensation Committee uses such awards to increase ownership and encourage retention. For an external executive hiring, an award may be made to offset comparable awards or other value forfeited as a result of the executive’s leaving the former employer. The award of time-based restricted shares or unrestricted shares of our common stock is recommended by the CEO and approved by our Compensation Committee and our board of directors, or in the case of a grant to the CEO, is recommended jointly by our Compensation Committee and Nominating/Governance Committee to our board of directors. The award is conditioned upon continued employment at the time of vesting, which is typically three years after the award date. Taxes on time-based restricted stock are borne by the executive officer.

Our Compensation Committee, with the approval of the full board of directors, awarded shares of our common stock to Mr. Williamson effective April 27, 2012, subject to time-based vesting. The award was made in recognition of outstanding 2011 performance and to enhance retention, as evidenced by the longer than typical vesting schedule of seven years. The award was made in the amount of 5,000 shares. Restrictions on the shares will lapse as of January 1, 2019, provided that Mr. Williamson remains an employee of the Company through the restriction period. On January 24, 2013, our Compensation Committee and board of directors awarded 10,000 shares of our common stock to Mr. Williamson. These shares were made in recognition of outstanding

2012 performance and will vest in five years provided Mr. Williamson remains an employee of the Company through the restriction period.

On July 26, 2012, our Compensation Committee, with the approval of the full board of directors, awarded 3,000 shares of our common stock to Mr. Miller, subject to time-based vesting. The award was made at the time of Mr. Miller’s hiring as vice president & treasurer. Restrictions on the shares vest one-third on Mr. Miller’s first anniversary with the Company; one-third on his second anniversary; and one-third on his third anniversary.

On February 15, 2013, our Compensation Committee, with the approval of the full board of directors, awarded shares of our common stock to Mr. Olagues (1,500 shares); Ms. Miller (1,250 shares); and Mr. Crump (1,250 shares). The time-based restricted stock awards were made in recognition of outstanding 2012 performance and will vest in three years provided Mr. Olagues, Ms. Miller and Mr. Crump each remain an employee of the Company through the restriction period.

Stock Options

Our Compensation Committee did not approve the grant of any stock options during 2013. Our Compensation Committee last approved a stock option grant in July 2007.

Stock Appreciation Rights

We have not granted any stock appreciation rights under the terms of the LTIP since its adoption.

Nonqualified Deferred Compensation Plan

We maintain a Deferred Compensation Plan so that directors, executive officers and certain key employees may defer receipt and taxation of certain forms of compensation. Directors may defer up to 100% of their compensation; executive officers and other key employees may defer up to 50% of their base salary and up to 100% of their annual cash incentive. We find the use of deferred compensation plans prevalent within our industry and within the companies in our Proxy Peer Group. Cleco does not match deferrals or contribute to the plan. Actual participation in the plan is voluntary. The notional investment

options made available to participants are selected by our CFO. The allocation of deferrals among investment options is made by individual participants. The notional investment options include money market, fixed income and equity funds; Cleco common stock is not currently an investment option under the plan, except for directors. No changes were made to the plan during 2013. Additional discussion of our deferred compensation plan is included on page 37.

Supplemental Executive Retirement Plan (“SERP”)

We maintain a SERP for the benefit of our executive officers who are designated as participants by our Compensation Committee. The SERP is designed to attract and retain executive officers who have contributed and will continue to contribute to our overall success by ensuring that adequate compensation will be provided or “replaced” during retirement. Supplemental retirement benefits are prevalent within our industry and the companies comprising our Proxy Peer Group. Our Compensation Committee views the SERP as a key recruiting tool to attract executive talent to the central Louisiana area.

Benefits under our SERP vest after ten years of service or upon death or disability while a participant is employed by Cleco. Our Compensation Committee may reduce the vesting period to less than ten years, which typically would occur in association with recruiting efforts. Benefits, whether or not vested, are forfeited in the event a participant is terminated for cause.

Benefits are based upon a participant’s attained age at the time of separation from service. The maximum benefit is payable at age 65 and is 65% of final compensation. Payments from the Company’s defined benefit pension plan (“Pension Plan”), certain employer contributions to our 401(k) Savings Plan and payments paid or payable from prior and subsequent employers’ defined benefit retirement or similar supplemental plans reduce or offset our SERP benefits. If a participant has not attained age 55 at the time of separation and receives SERP benefits before attaining age 65, SERP benefits are actuarially reduced to reflect early payment. The “Pension Benefits” table on page 36 lists the present value of accumulated SERP benefits for our named executives as of December 31, 2013. In 2011, our Compensation Committee amended the SERP to eliminate the business transaction benefit previously included in the SERP, as well as the requirement that a SERP participant be a party to an employment agreement to receive change in control benefits. No changes were made to the SERP during 2013. Additional discussion of the SERP design is included beginning on page 37.

Change in Employment Status and Change in Control Events

Historically, we have entered into executive employment agreements with our executive officers in an effort to attract and retain executive talent and to ensure their actions align with the interests of Cleco and its shareholders in the event of a change in control. The agreements have been structured to include payments for various separation events provided the executive officer agrees to post-employment conditions intended to protect our business and proprietary interests, including our

intellectual property, human capital and confidential information and executes a release. The level of exit payments and benefits provided under the executive employment agreements generally was determined by position within the organization.

In 2010, our Compensation Committee approved management’s recommendation that all executive employment agreements should not be renewed upon expiration. All such agreements have now expired.

During 2011, in conjunction with his being hired as CEO, we entered into an employment agreement with Mr. Williamson (the “Williamson Agreement”). This agreement is further discussed on page 31. All of the executive employment agreements with our executive officers, except the Williamson Agreement, were not renewed upon expiration, and the Company has no executive employment agreements other than the Williamson Agreement.

The Company may enter into new employment agreements with its executives, usually in connection with recruiting efforts. Our standard agreement provides for a non-renewing term, generally two years, and does not contain a change in control tax gross-up provision. Our Compensation Committee approved other revisions to our standard executive employment agreement based on input from Cook & Co., which we believe are consistent with current market trends while allowing us to maintain a competitive executive officer recruiting process.

See the section beginning on page 38 titled “Potential Payments at Termination or Change in Control” for a quantification and discussion of the material terms, potential payments and benefits associated with the Williamson Agreement, as well as the compensation history, annual compensation and benefit expense, status of deferred compensation, status of equity ownership, the value of vested awards and benefits and the value of accelerated compensation and benefits under various separation scenarios for our named executives who no longer have executive employment agreements.

The Cleco Corporation Executive Severance Plan

In recognition of the non-renewal of executive employment contracts, the board of directors adopted the Cleco Corporation Executive Severance Plan (the “Executive Severance Plan”) on October 28, 2011. The Executive Severance Plan provides our executive officers and other key employees with cash severance benefits in the event of a termination of employment, including involuntary termination in connection with a change in control.

Perquisites and Other Benefits

We may make available the following perquisites to our executive officers:

Our Compensation Committee approves the perquisites based on what it believes is prevailing market practice, as well as specific Company needs. Cook & Co. assists our Compensation Committee in this regard. We believe the relocation program is an important element in attracting executive talent to the central Louisiana area. Perquisite expenses related to business and spousal travel for our executive officers are reviewed by internal audit and any exceptions are reported to our Audit Committee.

See the section beginning on page 32 titled “All Other Compensation” for details of these perquisites and their value for our named executives.

Our executive officers, including the named executives, also participate in our other benefit plans on the same terms as other employees. These plans include paid time off for vacation, sick leave and bereavement; group medical, dental, vision and prescription drug coverage; basic life insurance; supplemental life insurance; dependent life insurance; accidental death and dismemberment insurance; defined benefit pension plan (for those hired prior to August 1, 2007); and the 401(k) Savings Plan with a Company match for those employees hired before August 1, 2007, as well as a 401(k) Savings Plan with an enhanced benefit for those employees hired after August 1, 2007, including Messrs. Williamson and Miller.

Other Tools and Analyses to Support Compensation Decisions

Tally Sheets

At least annually, our Compensation Committee reviews tally sheets that set forth the items listed below. This review is conducted as part of the comparison of the compensation and benefit components that are prevalent within our Comparator Group. The comparison facilitates discussion with our Compensation Committee’s outside independent consultant as to the use and amount of each compensation and benefit component versus the applicable peer group.

Trends and Regulatory Updates

As needed, and at least annually, our Compensation Committee reviews reports related to industry trends, legislative and regulatory developments and compliance requirements based on management’s analysis and guidance provided by Cook & Co., as applicable. Plan revisions and compensation program design changes are implemented as needed.

Risk Assessment

Our Compensation Committee also seeks to structure compensation that will provide sufficient incentives for our executive officers to drive results while avoiding unnecessary or excessive risk taking that could harm the long-term value of the Company. Our Compensation Committee believes that the following actions and/or measures help achieve this goal:

During 2013, our Compensation Committee, with the assistance of Cook & Co., reviewed the Company’s assessment of compensation risk of the Company’s incentive plans. Our Compensation Committee concluded that our compensation policies do not create risks that are reasonably likely to have a material adverse effect on the Company.

Stock Ownership Requirements for Executive Officers

Our Compensation Committee has adopted an executive stock ownership policy requiring our CEO to own Cleco common stock in an amount equaling five times base salary; senior vice presidents in an amount equaling three times base salary; and vice presidents in an amount equaling one times base salary. The policy also contains a retention requirement as a means of achieving the specified common stock ownership multiple. Until an executive reaches his or her required ownership level, he or she must retain a minimum of 50% of the after-tax shares received from restricted stock awards made under the LTIP.

Anti-hedging Policy

In October 2007, our board of directors approved a policy prohibiting directors, officers and employees from engaging in privately-negotiated or other structured hedging transactions or any other forms of hedging or monetization transactions related to Cleco common stock. The board believes this policy aligns the interests of the Company’s directors, officers and employees with those of its long-term shareholders.

Recoupment of Prior Awards Paid

Our Compensation Committee and board of directors approved a Recovery Policy in 2007. If the Company is required to restate its financial statements or other financial results, our Compensation Committee is authorized to adjust or otherwise recover an executive officer’s award, provided that the amount of the award is based on financial performance and our Compensation Committee determines the executive officer engaged in intentional misconduct or in an intentional act or omission related to the cause for the restatement. Awards subject to the policy include any payment, accrual or other benefit paid or earned on or after January 1, 2008. Each of our executive officers has signed a notice acknowledging application of this policy, and we have conditioned their annual cash incentive agreements and restricted stock grants on the policy.

Board of Directors Compensation

Our Nominating/Governance Committee also engages our Compensation Committee’s independent consultants to consult on matters concerning director compensation. In its analysis of director compensation, our Nominating/Governance Committee reviews competitive market information from our Proxy Peer Group, including information related to the payment of annual retainer fees for directors, annual retainer fees for committee chairs, per meeting fees and equity

award levels. Our Compensation Committee conducts a similar review with respect to the compensation of the chairman of the board. Details of director compensation are shown in the “Director Compensation” table on page 44.

U.S. Federal Income Tax Considerations

Restricted Stock

A participant who receives an award of restricted stock or CEUs under our LTIP generally does not recognize taxable income at the time the award is granted. Instead, the participant recognizes income when:

The amount of income recognized by a participant is equal to the fair market value of our common stock on the vesting or lapse date, less the cash, if any, paid for the shares, and the cash received on the settlement of CEUs. A participant may elect to accelerate the recognition of income with respect to restricted stock by making an IRC Section 83(b) election, which causes income to be recognized at the time of the award in an amount equal to the current fair market value of the stock on the award date, less the cash, if any, paid for the shares.

Income recognized by a participant is treated as compensation and is subject to applicable withholding for income and employment taxes. Cleco receives a corresponding compensation deduction for tax purposes when a participant recognizes income.

Stock Options

All options granted under our LTIP are nonqualified or non-statutory options. Cleco currently does not grant or have outstanding incentive stock options within the meaning of IRC Section 422. The grant of an option is not a tax event. A participant recognizes income when the option is exercised in an amount equal to the difference between the exercise price of the option and the fair market value of our common stock on the exercise date. The income is treated as compensation and is subject to applicable withholding for income and employment taxes. Cleco receives a corresponding compensation deduction for tax purposes when the option is exercised.

IRC Section 162(m)

IRC Section 162(m) limits to $1,000,000 the amount Cleco can deduct in a tax year for compensation paid to our CEO and each of the three other most highly compensated executive officers (other than our CFO). Performance-based compensation paid under a plan approved by our shareholders that satisfies certain other conditions may be excluded from the calculation of the limit. We have taken the action we consider appropriate to preserve the deductibility of compensation paid to our executive officers, but our Compensation Committee has not adopted a formal policy that requires all compensation to be fully deductible. As a result, our Compensation Committee may pay or award compensation that it deems necessary or appropriate to achieve our business goals and to

align the interests of our executives with those of our shareholders, whether or not the compensation is performance-based within the meaning of IRC Section 162(m) or otherwise fully deductible.

Our LTIP was approved by our shareholders, permitting grants and awards made under that plan to be treated as performance-based. Generally, options, performance-based restricted stock and performance-based CEUs are intended to satisfy the performance-based requirements of IRC Section 162(m) and are intended to be fully deductible. Amounts paid under the PFP Plan count toward the $1,000,000 limit.

IRC Section 409A

IRC Section 409A generally was effective as of January 1, 2005. The section substantially modified the rules governing the taxation of nonqualified deferred compensation. The consequences of a violation of IRC Section 409A, unless corrected, are the immediate taxation of amounts deferred, the imposition of an excise tax and the assessment of interest on the amount of the income inclusion, each of which is imposed upon the recipient of the compensation. Our plans, agreements and incentives subject to IRC Section 409A have been operated pursuant to and are in compliance with IRC Section 409A.

General

The Summary Compensation Table sets forth individual compensation information for the CEO, the current CFO, the former CFO and the three other most highly compensated executive officers of Cleco and its affiliates for services rendered in all capacities to Cleco and its affiliates during the fiscal years ended December 31, 2013, December 31, 2012 and December 31, 2011 for Messrs. Williamson, Olagues and Hoefling; during the fiscal years ended December 31, 2013 and December 31,

2012 for Ms. Miller and Mr. Crump who became named executive officers for the first time in 2012; and during the fiscal year ended December 31, 2013 for Mr. Miller who became CFO in 2013. Compensation components represent both payments made to the named executives during the year and other forms of compensation, as follows:

Mr. Williamson’s Employment Agreement

The compensation of Mr. Williamson, our CEO, was based largely on the terms of the employment agreement negotiated with Mr. Williamson at the time of his hiring in 2011. Because of his substantial experience as a public company CEO, his experience in the energy, utility and regulated industries, and the opportunity to recruit executive talent of his caliber to the central Louisiana area, our Compensation Committee believed it was important to document the terms of his employment in an employment agreement effective July 5, 2011. The components of his compensation are base salary, annual cash incentives, equity incentives, the SERP, change in control events and payments, perquisites and other benefits. Mr. Williamson was paid a prorated amount equivalent to an annualized base compensation of $700,000 for 2011. In January 2012, Mr. Williamson waived the minimum increase in his base compensation and the related impacts on his cash and equity incentive opportunities for 2012 as set forth in his employment agreement to keep his compensation aligned with other members of senior management who were not given base pay increases in 2012. This action was consistent with Mr. Williamson’s desire to shift additional compensation to performance-based pay among the senior management of the Company. The components of Mr. Williamson’s compensation are further discussed below.

Salary