PG&E gets court OK for $235 million in bonuses amid wildfire woes, bankruptcy

George Avalos, The Mercury News on

Published in Business News

PG&E will be able to grant $235 million in bonuses to roughly 10,000 employees, a bankruptcy judge ruled Tuesday, a decision that was issued despite PG&E's wildfire-linked woes and the disgraced company's proposal to impose a big increase in monthly utility bills on its customers.

The bonus packages, part of PG&E's short-term incentive program, or STIP, will apply to the performance during 2019 of the affected company employees, according to the ruling by U.S. Bankruptcy Judge Dennis Montali.

"To decide that thousands of employees should suddenly not get compensation seems like not the right way to go," Judge Montali said in issuing his ruling to allow the bonuses.

On Jan. 29, PG&E staggered into a bankruptcy filing that listed $51.69 billion in debts in the face of a forbidding landscape of liabilities and wildfire-related claims following lethal infernos in Northern California in 2015, 2017 and 2018 that were caused by, or directly associated with, PG&E's equipment.

PG&E is already a convicted felon for crimes it committed before and after a fatal explosion in San Bruno. Soon after the bast that killed eight, federal investigators determined the disaster was triggered by a deadly combination of PG&E's flawed record keeping and shoddy maintenance, and lazy and ineffective oversight by the Public Utilities Commission, which regulates PG&E.

The hearing featured testimony from John Lowe, PG&E's senior director total rewards, who explained how the utility determines the bonuses for an individual employee. The short-term incentive program is primarily directed at an array of workers who aren't covered by a union contract. These incentives exclude the chief executive officer and other top management at PG&E.


PG&E stated in the presentation 65 percent of the weight for determining an employee's performance would be safety, while 25 percent of the weighting would be based on PG&E's financial performance and 10 percent would be based on customer satisfaction.

"The safety metric is supposed to be consistent with PG&E's wildfire mitigation plan," Lowe testified in court.

The company insisted that the company's metrics and bonus targets are not merely "layups," which is corporate-speak for a performance goal that can be easily reached with little effort.

"We provide guidance that is challenging but achievable," Lowe testified. "The metrics are challenging."


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