PG&E; Awards Stock, Bonuses to Top Execs
Eliciting protests from consumer activists, PG&E; Corp. said it paid Chairman and Chief Executive Robert D. Glynn Jr. a $1.18-million bonus for 2001, a year that saw the company’s utility tumble into bankruptcy while the parent earned $1.1 billion.
In all, PG&E;’s top 11 executives received $4.68 million in 2001 bonuses tied to operating profit for the year, PG&E; Corp. said Wednesday in a filing with the Securities and Exchange Commission. PG&E; executives also received $13.5 million in restricted stock.
PG&E; spokeswoman Renee Parnell said the bonuses reflect healthy earnings for 2001, compared with a loss of $3.4 billion for 2000, when electricity prices first soared but the utility, Pacific Gas & Electric Co., could not pass those costs along to its customers. But last year, customer rate increases and sharply lower electricity costs helped put PG&E; into the black.
“That portion of Mr. Glynn’s compensation is based solely on corporate operating earnings per share,” Parnell said. “If we don’t meet those targets, executive pay is reduced dramatically. Case in point, 2000.”
For that year, Glynn and six other PG&E; executives received no bonuses.
But consumer groups argued that PG&E; is inflating its earnings by including the extra cash generated by higher customer rates and lower electricity costs.
Southern California Edison is using that so-called headroom to repay its creditors; PG&E; is still trying to get a reorganization plan approved by the U.S. Bankruptcy Court while state regulators craft a plan of their own.
“They are basing their bonuses on phantom earnings,” said Doug Heller of the Foundation for Taxpayer & Consumer Rights. “This is money that we believe belongs back in ratepayer hands.”
Mindy Spatt, spokeswoman for the Utility Reform Network, called the bonuses “obscene.”
“This is a company that is in Bankruptcy Court claiming it can’t pay its bills and needs to raise electricity rates so it can throw money at the executives that ran it into bankruptcy,” Spatt said.
Pacific Gas & Electric sought bankruptcy-court protection from its creditors in April after piling up $9 billion in electricity debts. Not included in the bankruptcy were the parent company and a sister subsidiary, National Energy Group, that builds power plants and trades energy.
Glynn’s base salary for 2001 was $900,000, unchanged from the previous year.
In addition to his $1.18-million bonus, Glynn received $3 million in stock with selling restrictions attached. Glynn got a $1.22-million bonus in 1999 and no restricted stock.
Gordon R. Smith, president of Pacific Gas & Electric, received a salary of $630,000, a bonus of $664,808 and restricted stock worth $1.23 million.
Another executive, Thomas G. Boren, chief executive of National Energy Group, was paid more. Boren received a salary of $690,000, a bonus of $679,478 and restricted stock worth $1.75 million.
