6 things to know about the PG&E bankruptcy filing and how it affects you
Awful timing, PG&E.
In a move that seems calculated to further enrage customers, the giant utility is asking a bankruptcy judge for permission to spend more than $130 million on bonuses and other employee perks earned in 2018 — even as victims of the Camp Fire struggle to find basic shelter.
As justification, PG&E says its 24,000 employees are the “lifeblood” of its business; without them “operations would come to a halt.”
That’s true, but the same applies to just about every other company in existence — whether it installs rain gutters, builds cars or supplies energy.
The fact that employees are important doesn’t justify paying out millions in bonuses — not when PG&E says it filed Chapter 11 bankruptcy because it can’t afford to compensate victims of wildfires linked to its electrical equipment.
Not when ratepayers could wind up on the hook for paying for fire-related damages.
Not when unsuspecting investors, including members of the California Public Employees’ Retirement System, are losing tens of millions of dollars due to plummeting stock prices.
Not when PG&E needs to prioritize inspecting power lines and trimming trees to avoid similar fire disasters in the future.
And certainly not when it has a history of big payouts to top executives, including $2.5 million for departing CEO Geisha Williams.
At least these bonuses, if approved, will not go to top management employees classified as “Insiders” in the bankruptcy filing.
However, if PG&E really wanted to show good faith, it would have canceled bonuses altogether, or at least reduced them substantially.
And it isn’t just the annual bonuses PG&E wants to pay; it’s also seeking to spend down $650,000 remaining in a Rewards and Recognition Program fund. Those rewards — in the form of cash and gift cards — cost the company $15 million per year.
Then there’s the temporary assignment award program ($2.6 million per year); the service award program that honors longevity ($850,000 per year); and a limited retention program ($1.2 million per year) for “key, hard-to-replace employees.” PG&E is asking to award any funds remaining in those accounts.
There also is a special retention program for employees of the Diablo Canyon nuclear power plant, but that’s protected by state law and isn’t under the purview of bankruptcy court.
PG&E says employees rely on the bonuses “on an annual basis.” It also argues that it will lose valuable employees if it doesn’t offer bonuses — the same justification taxpayers hear when government agencies offer inflated salaries and benefits to high-ranking employees.
Taxpayers are fed up, and ratepayers should be, too.
PG&E employees deserve to be justly compensated, but paying large bonuses on top of already generous salaries and benefits is unfair to ratepayers, especially at this moment in its history.
As the name implies, a “bonus” should be a reward offered for exceptional service — not something so commonplace that it’s taken for granted.
PG&E should not be allowed to pay out $130 million in bonuses, and it should permanently scale back incentive programs in the future.