PG&E Corp. awards millions in bonuses despite bankruptcy

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Megawatt Daily

Eleven PG&E Corp. executives received more than $ 4.6-million in 2001 bonuses, according to a proxy statement the company issued Wednesday in advance of its April 17 shareholder meeting.

The bonuses as well as salary increases and restricted stock awards came the same year the company’s utility arm, Pacific Gas and Electric, filed for bankruptcy protection.

According to the proxy statement, while PG&E Corp. CEO, Chairman and President Robert Glynn earned $ 900,000 in base salary last year, an amount equal to what he was paid in 2000, the company also awarded Glynn a nearly $ 1.2-million bonus and $ 3-million in stock in 2001. Glynn received no bonuses in 2000.

PG&E Corp. Chief Financial Officer Peter Darbee in 2001 saw his salary increase from $ 415,000 to $ 455,000 with a bonus of $328,578 and $ 1.125-million stock reward.

The utility also rewarded its executives last year with bonuses. CEO and President Gordon Smith maintained his 2000 salary of $ 630,000, but received a $ 664,808 bonus and a $ 1.75-million stock reward. CFO and Treasurer Kent Harvey saw his salary rise from $ 260,000 to $ 285,000 with a bonus of $ 213,465 and a stock reward of $ 625,000.

PG&E senior vice presidents lucky enough to have had bonuses in 2000 received higher awards last year. Thomas Boren, CEO and president of PG&E‘s unregulated power producing arm National Energy Group, saw his salary increase to $ 690,000 from $ 630,000 with his bonus rising from $ 441,790 to $ 679,478. His stock reward was $ 1.75-million. NEG COO of Trading L.E. Maddox, NEG COO of East Region P. Chrisman Iribe and NEG COO of West Region Thomas King saw salary increases of $25,000 to $ 425,000 and bonus increases of $ 6,914 to
$306,914. They saw stock rewards of $ 1.125-million each.

In the proxy statement, PG&E attributed the bonuses to ”achievement of corporate and organizational objectives” over the past three years. The stock rewards, which fluctuate with market value, were offered, ”to retain certain key personnel to ensure a continued workforce of experienced and knowledgeable employees in light of the energy crisis, bankruptcy proceedings and the proposed Plan of Reorganization [for the utility now before a bankruptcy court for approval].” The shares automatically vest in December 2004, the statement said.

The news of bonuses and stock rewards did not sit well with consumer advocates, which claimed the executives should not benefit from operations that have led to bankruptcy and raised utility rates to all-time highs in California. ”PG&E executives killed their own utility.They deserved to be dumped and not showered with gifts,” said Doug Heller of the Foundation for Taxpayer and Consumer Rights. Mindy Spatt of The Utility Reform Network, said the bonuses show that, ”The fat cats are getting fatter at the expense of ratepayers and taxpayers.”


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