PG&E Shareholders Pass Compensation Resolution

A Pacific Gas & Electric shareholder resolution critical of management?s compensation appeared to get a majority of votes and two others garnered strong support at PG&E?s annual shareholder meeting April 20. The nonbinding resolution criticized the payout of $84.5 million in retention bonuses to 17 executives after the utility?s bankruptcy. It recommended a limit on compensation to utility executives who leave the company. That resolution gained 55.3 percent on a preliminary tally. Other shareholder resolutions that garnered strong support?despite opposition by PG&E?s board?include a call for the company to book as expenses stock options awarded to employees, with 44.5 percent preliminarily backing the measure. A proposal to tie the value of options to competitive benchmarks got an early vote of 38.6 percent. The resolution to limit production and storage of high-level radioactive waste at the utility?s Diablo Canyon plant received 3 percent of the early vote. PG&E Corp. chief executive officer Peter Darbee told shareholders it is now clear that the energy crisis was caused by a shortage of power, market manipulation, and flaws in the structure set up to deregulate the industry. He painted PG&E as a victim of a flawed restructuring plan that quickly sent it into bankruptcy reorganization. ?You endorsed? deregulation, said shareholder Nick Rossi. ?You shouldn?t have endorsed it. Some blame belongs to management.? Rossi was the author of the management compensation resolution. Chief financial officer Christopher Johns said PG&E expects profits to grow at a 4 percent to 6 percent annual rate during the next five years. Utility chief executive officer Gordon Smith said the utility expects to have ?healthy reserves? of power to keep the lights on this summer but would need to add 2,200 MW of new capacity by 2010. Darbee also told attending shareholders that the utility plans to install advanced meters and would be seeking approval from the California Public Utilities Commission in May to recover the costs. Justin Bradley, the Silicon Valley Leadership Group director of energy programs, welcomed the move and asked for an update on expected benefits of the utility?s long-term procurement. Darbee said that at the end of this month, the utility will see where the combination of utility-owned, turnkey, and merchant generator proposals shakes out. Former chief executive officer Bob Glynn, who continues to serve as chair of PG&E?s board, played a limited role in this year?s meeting. Instead, Darbee ran the show and, in a departure from Glynn?s approach, called on other executives and even one board member to respond to shareholder questions. This meeting was held in San Ramon, unlike recent history, where all shareholder meetings have been in downtown San Francisco, up the hill from PG&E headquarters. About 200 people attended, which appears to be slightly down from past meetings. Sempra recently came under fire for having its shareholder meeting in London, England. There, attendance diminished from the usual 200-plus to about 50, according to reports.

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PG&E Shareholders Pass Compensation Resolution

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