The federal judge overseeing PG&E’s bankruptcy grilled the company’s lawyer Friday on the troubled utility’s plan to award as much as $20 million in bonuses to more than a dozen top executives, suggesting that he might order that any bonuses come in the form of stock instead of cash.
PG&E told U.S. Judge Dennis Montali the bonuses are designed to boost safety and bring executive compensation in line with other utilities. The plan involves giving between $5 million and $16 million to a dozen named top executives – depending on a formula that emphasizes safety performance — and as much as $4 million more to two additional unspecified top figures.
But Judge Montali was clearly skeptical of the plan, pointedly telling PG&E lawyer Stephen Karotkin that if preventing more tragedies and wildfires wasn’t enough of an incentive “to do the right thing, I don’t know what is.” And adding that if executives still did not feel they were “incentivized enough, they should find another job.”
Karotkin countered that company executives have been “working very hard” to assure safety.
“The company has a business to run,” he told the judge at one point.
But attorneys for wildfire victims and ratepayer groups said the bonuses are especially ill-timed this year — given that PG&E is still under investigation for the deadly Camp fire last November.
“The DA’s investigating 85 counts of manslaughter,” said Steve Campora, who represents Camp and North Bay firestorm victims, after the hearing Friday. “While at the same time, fire victims haven’t got one dollar. That makes no sense to me, at all.”
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Separately, Judge Montali lashed out at PG&E for its belated disclosure that it gave its new CEO Bill Johnson a $3 million signing bonus, but stopped short of ordering that he give it back.
The judge did suggest he might order that the dozen executives get only stock and not guaranteed cash bonuses, so as to more effectively stress performance. In the end, he said he needed more time to make a final ruling.
