Amid bankruptcy, PG&E promises millions to new CEO

April 18, 2019

Amid its bankruptcy, PG&E has hired a new chief executive officer who will receive a $2.5 million base salary, a $3 million signing bonus and an estimated $3.5 million a year in stock, the company stated in a filing with the Security and Exchange Commission (SEC). [Cal Coast Times]

On April 10, the PG&E Board of Directors hired Bill Johnson as the utility’s new CEO and president. Johnson, 65, has committed to leading the company for three years, during which he will receive a $2.5 million base salary and an annual equity award with a target value of $3.5 million, PG&E stated in the SEC filing.

One quarter of the equity award will consist of time-based restricted stock units, while 75 percent will consist of performance-based restricted stock units. Additionally, Johnson will receive a one-time award consisting of three tranches of performance-based stock options, which will be payable in cash or shares.

Johnson will receive his $3 million signing bonus on May 1, his first day on the job as PG&E’s CEO. The signing bonus is subject to clawback if Johnson resigns or is fired during his first year on the job.

For more than six years, Johnson has served as president and CEO of the Tennessee Valley Authority, the nation’s largest publicly owned utility, which operates across a seven-state region. Previously, Johnson was the chairman, president and CEO of Progress Energy, a large utility that merged with Duke Energy.

“We have heard the calls for change and have taken action today to ensure that PG&E has the right leadership to bring about real and dynamic change that reinforces our commitment to safety, continuous improvement and operational excellence,” the PG&E board said in a statement announcing Johnson’s hire. “With more than a decade of combined chief executive experience at two large utility companies, Mr. Johnson has a deep understanding of managing risk and the responsibility of keeping customers safe.”

Johnson said in a statement that he is humbled to take on the challenge of leading PG&E.

“I am humbled to take on this new challenge and am dedicated to meeting the high expectations that our customers, regulators and legislators have for PG&E,” Johnson said. “While the challenges facing PG&E and California are significant, by working together, we will overcome them to serve the best interests of our customers, their families and the communities we serve. This starts with a  steadfast commitment to providing safe and reliable power.”

In addition to hiring a new CEO, PG&E has restructured its board of directors. The revamped board will include 10 new directors who will join five continuing directors.

With the company facing billions of dollars in liabilities for involvement in California wildfires, PG&E filed for Chapter 11 bankruptcy in January. The utility has already been found responsible for some Northern California wildfires, and the company has stated in a government filing that its equipment probably will be found to have started the 2018 Camp Fire, the deadliest and most destructive blaze in state history.

Last November, PG&E’s share price plummeted from nearly $50 to below $18. In January, PG&E stock fell below $10, but it has since recovered to more than $20.

PG&E stock reached nearly $25 on Monday and closed at $21.85 on Wednesday.