The federal bankruptcy trustee and the ratepayer group TURN are calling on the federal bankruptcy judge to block PG&E from handing out as much as $16 million in bonuses to a dozen top executives this year.
Judge Dennis Montali is set to rule next week on PG&E’s proposal of awarding between $5.4 million and $16.3 million in stock and cash to the top-tier management whose combined salaries approach $6 million. The company wants up to $4 million more to be set aside for two unspecified executives.
The federal bankruptcy trustee’s office filed a motion opposing the bonuses, saying there is not enough information in the company plan to establish how the bonuses are to be awarded. In its court filing Wednesday, The Utility Reform Network argued the bonuses are not justifiable, especially given all the safety problems that have come to light for PG&E. TURN’s executive director Mark Toney said the request left him shocked and angry.
“I am absolutely outraged that PG&E has the gall to ask for executive bonuses,” he said. “You’ve got to remember, every dollar of shareholder money that goes to executive bonuses is a dollar less of shareholder money to pay wildfire claims. PG&E’s priority should be paying wildfire claims, getting out of bankruptcy and not giving bonuses to its top executives.”
In TURN’s filing, attorneys argue the company simply has not made a case for the money.
“Little is known of the debtors’ own plan proposal beyond their desire to burden ratepayers with a large portion of the liability for their own corporate malfeasance,” the group’s motion argues, adding that the company has yet to provide a proper basis for the bonuses or show it is not simply throwing money at executives to get them to stay.
TURN’s motion also cites recent concerns expressed by U.S. Judge William Alsup about the company’s recent political contributions and safety track record at the time it was handing out $5 billion in dividend payments.
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The Wall Street Journal and NBC Bay Area have reported that in the decade before the fire, the company failed to act on the urging of a consultant that it should carry out detailed inspections on its aging transmission towers, including climbing inspections that experts believe would have spotted the worn hook that likely sparked the deadly Camp Fire in Butte County. Alsup has given PG&E until the end of the month to respond to the Wall Street Journal’s report.
Given what has been reported, TURN argues that handing out cash now can’t be justified.
“TURN respectfully submits that this Court should not award persons who may be directly involved in the conduct about which Judge Alsup is inquiring,” especially bonuses designed to encourage safety, in light of the revelations.
