Already facing criticism over a proposed bonus plan for thousands of employees, PG&E plans to pay its new chief executive at least $6 million a year to run the bankrupt utility.
In a filing with the Securities and Exchange Commission, PG&E Corp. said Tuesday that new CEO Bill Johnson receive $6 million a year in base pay and stock awards. The stock awards will be based on a performance scale heavily weighted toward the utility’s safety record — an apparent nod to critics who have ripped PG&E over the deadly wildfires of 2017 and 2018.
Johnson, 65, also will receive a “one-time transition payment” of $3 million on his first day on the job, May 1. He could have to cough up that payment if he leaves or his fired for cause within his first year.
Besides those payments, Johnson, who signed a three-year employment contract, will receive stock options. The monetary value of those options wasn’t immediately apparent.
PG&E is based in San Francisco, one of the most expensive cities in the world, where the median income hovers around $88,000 a year for residents. The average pay for CEOs at major U.S. companies is $13.9 million, according to 2017 data from the AFL-CIO.
As head of the government-owned Tennessee Valley Authority, he made $8.1 million last year in total compensation, making him the highest-paid federal employee in the country. His predecessor at Pacific Gas and Electric Co., Geisha Williams, made total compensation of $8.6 million in 2017, the last year for which records are available.
Johnson’s compensation with PG&E is subject to approval of the judge overseeing the utility’s Chapter 11 bankruptcy. Next week Judge Dennis Montali is expected to rule on a separate request by PG&E to pay an estimated $235 million in incentive bonuses to thousands of employees this year. Lawyers for wildfire victims are objecting, saying the money should be spent paying their clients. PG&E canceled its bonus plan for 2018.
Mindy Spatt of San Francisco consumer advocate The Utility Reform Network called Johnson’s compensation “outrageous” in light of PG&E’s difficulties in paying wildfire victims.
PG&E spokesman Andrew Castagnola said the utility doesn’t plan to pay Johnson with ratepayer dollars.
PG&E filed for bankruptcy in early January, citing the weight of $30 billion in wildfire liabilities. Gov. Gavin Newsom last week raised the possibility of changing the California law to give PG&E and other utilities greater protection against liabilities from future wildfires.