Judge approves PG&E’s $235 million employee bonus plan

April 24, 2019

A bankruptcy judge on Tuesday approved PG&E’s plan to award $235 million in bonuses to approximately 10,000 employees this year. [SF Chronicle]

PG&E regularly pays bonuses to about 40 percent of its workforce as part of the employees’ annual compensation. The payments are considered bonuses, but they are largely uniform amounts.

Faced with public backlash for its role in Northern California wildfires, and after filing for Chapter 11 bankruptcy in January, PG&E canceled the payment of $130 million in bonuses that its employees earned in 2018. But, the utility plans to pay the bonuses quarterly for 2019, starting with a retroactive sum for the first three months of this year.

Stephen Karotkin, a PG&E attorney, told a federal bankruptcy judge that competitive compensation would bring stability to the utility’s workforce and would benefit the public as well. PG&E also says it is giving more weight to fire safety in determining overall bonus payment levels.

Robert Julian, an attorney for a committee of fire victims participating in the bankruptcy process, argued the safety standards in PG&E’s bonus program were misleading and inadequate. Julian said PG&E’s vegetation management plan only consists of clearing four feet above power lines, while the California Public Utilities Commission has recommended up to 12 feet of clearance, and a federal judge has ordered the utility to follow the state commission’s directions.

U.S. Bankruptcy Judge Dennis Montali ruled in favor of PG&E, saying that denying the bonuses would have punitive consequences for thousands of workers whose jobs have nothing to do with fire safety.

Montali’s ruling that PG&E can give employees $235 million in bonus pay this year came just one day after the utility submitted a request to the PUC for permission to increase its profit margin and charge consumers higher rates for gas and electricity. If approved, the rate hike would result in the average household’s electricity and natural gas bill increasing by $22.67 a month.