6 things to know about the PG&E bankruptcy filing and how it affects you
PG&E wants to start paying out millions of dollars in employee bonuses again.
The utility asked a bankruptcy judge late Wednesday for permission to resume its employee incentive program for 2019. The cost could be as high as $235 million and would be spread among thousands of workers.
PG&E argued that it’s worth the expense to retain valued employees and stabilize the company. But with the company in bankruptcy and facing $30 billion in potential liabilities to wildfire survivors, the request is almost certain to generate considerable opposition from lawyers for the survivors and other creditors, as well as elected officials and regulators.
The $30 billion estimate includes potential liabilities from the November Camp Fire, which destroyed most of the town of Paradise and killed 85 people, more than any wildfire in California history. PG&E recently said a faulty transmission tower was probably the cause of the fire.
In late February PG&E canceled bonus payments based on 2018 performance, telling workers counting on the checks that it couldn’t justify bonuses when wildfire survivors face “significantly greater hardships.”
PG&E has said the 2018 payments would have totaled $130 million, although company spokesman Andrew Castagnola said Thursday that figure represented a “partial payout,” not the full plan. He wouldn’t say how much employees would have received in total if the 2018 program hadn’t been scrubbed.
Under the proposed 2019 plan, the $235 million would be spread among about 10,000 employees, mostly rank and file and middle management. “No senior officers are included in this,” Castagnola said.
“PG&E’s 2019 employee incentive plan prioritizes safety and operational excellence, with safety accounting for 50% of the performance metrics,” the company said in a prepared statement. “PG&E believes that this at-risk component of our employees’ compensation provides appropriate incentives for our team members to help us achieve our safety and operational goals. The 2019 plan was formulated to provide continued market-based compensation and appropriate incentives for participating employees, with a focus on both strong performance and our most important priorities. The company’s most senior leaders are not eligible to participate in the 2019 employee incentive plan.”
Instead of a lump sum, as PG&E has traditionally done, the new bonuses would be paid quarterly. The first payment, if the court approves, would come sometime this spring. A hearing is set for March 27.
The filing came a day after the federal judge overseeing PG&E’s probation case threatened to prohibit the utility from paying its quarterly shareholder dividends, saying PG&E should conserve its cash to work on wildfire safety.