PG&E Sells Headquarters for $18M, Exec Compensation Soars

Pacific Gas & Electric announced May 24 it found a buyer for its long-time headquarters in downtown San Francisco. It will sell its buildings on Beale and Market streets near the San Francisco Bay for $800 million to Hines Atlas US LP, a Delaware limited partnership. After 115 years in the City by the Bay, the utility will relocate to nearby Oakland starting next year to lower its costs.

The sale’s announcement pushed up PG&E’s stock 0.9% in pre-market trading May 24, Bloomberg reported.

Last June, the company announced it was putting the high-rise offices up for sale. The net gain and savings is supposed to lower customers’ utility bills.

“We’ve made a commitment to keep customer costs as low as possible, and one way we’re following through on that is by selling non-core assets including real estate,” PG&E Chief Executive Officer Patti Poppe stated Monday. “This sale and relocation will achieve cost savings that directly help reduce customer bills.”

The sale must be approved by the California Public Utilities Commission.

Earlier, the company revealed in a contrasting Securities & Exchange Commission filing that the 2020 principal executive officer compensation jumped last year to almost $7 million. That was despite the fact that the company emerged a second time from bankruptcy last June in the face of massive wildfire liability and is convicted of felonies because its equipment sparked the terrible fire in the town of Paradise that left more than 80 dead. It also is fighting felony charges by the Sonoma County District Attorney because its equipment started the Kincaid Fire in late October 2019.

“Outrageous”

“This is outrageous and unjustified,” Mark Toney, The Utility Reform Network executive director, said the of the executive compensation increases.

The executive compensation of $6.91 million last year is 31 times the median utility worker salary of $220,954, according to PG&E. Although the average salary has not changed since 2018, executive compensations rose significantly in 2020. It increased two and a half times last year compared to the 2018 average of $2.64 million, which was 12 times higher than the median worker salary.

Not included is CEO Poppe’s compensation, who joined the company earlier this year. Her total 2021 compensation is more than $20 million. That includes $9.25 million under the company’s Long Term Incentive Plan, plus another $6.6 million cash bonus.

Her “one-time sign-on compensation was designed to replace compensation she forfeited with her previous employer in order to join PG&E,” Ari Vanrenen, PG&E spokesperson, wrote in an email. The “Compensation Committee determined that this one-time award is in line with market standards and believes it is appropriately structured to protect shareholder interests through clawback provisions and other stipulations.”

The 2020 executive compensation packages, which according to a DEF-14 A filing made April 8, far exceed $7 million. They include the following:

• $6.17 million to William Smith, who was interim CEO in 2020.
• $5.12 million to John Simon, company general counsel.
• $3.93 million to Jason Wells, former CFO, up from $1.2 million in 2019.
• $3.7 million to Janet Loduca, former general counsel, up from $1.2 million in 2019.
• $3.63 million to Andrew Vesey, former utility CEO, up from $2.37 million in 2019.
• $2.6 million to James Welsh, chief nuclear officer, compared to $1.07 million two years ago.
• $2.08 million to Michael Lewis, interim utility CEO. His 2019 compensation was $697,000.