PG&E seeks court approval of $235 million short-term incentive plan

By Caroline Salls

Pittsburgh, March 7 – PG&E Corp. and Pacific Gas and Electric Co. requested court approval of a short-term incentive plan for eligible employees, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the Northern District of California.

The company said the targeted potential award payout under the proposed plan is $235 million, with a minimum payout of $0 and a maximum payout of $350 million, which includes IPM.

In light of the 2018 Northern California wildfires, the hardships incurred by communities and others and PG&E’s financial circumstances and need to seek relief under Chapter 11, the utility said its board of directors adopted senior management’s recommendation to forego paying the “at-risk” short-term incentive-based component of its 2018 overall compensation program to roughly 11,000 of the employees who participated in the program.

Over the past several weeks PG&E said it has worked with its advisers to formulate necessary adjustments to the incentive-based component of its employee compensation program to address the pending Chapter 11 cases.

As a result of this work, the company said it has modified the incentive plan for the 2019 fiscal year.

As with previous years, PG&E said the 2019 plan is purely incentive-based, conditioning any award granted under the plan on safety, financial and operational metrics.

“In deliberately designing the plan this way, the debtors are sending a clear message to their workforce that the safety of the communities the debtors serve and of their employees is of paramount concern during the restructuring process and into the future,” the motion said.

The company said its most senior leaders are not eligible to participate in the incentive program.

About 10,000 non-insider employees will be eligible to receive short-term incentive plan rewards.

The performance metrics will be measured quarterly from Jan. 1 through Dec. 31, 2019. Following internal audit and certification of performance, PG&E said awards will be paid out on a quarterly basis based on cumulative year-to-date results.

A hearing is scheduled for March 27.

The electric and natural gas utility is based in San Francisco. The company filed bankruptcy on Jan. 29 under Chapter 11 case number 19-30088.

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