Reported from The Mercury News
Despite presiding over far-ranging uncertainties arising from deadly wildfires in Northern California, PG&E’s top boss captured a hefty increase in total compensation during 2017, according to a new regulatory filing.
In 2017, Geisha Williams, PG&E’s chief executive officer, was awarded $8.6 million in total direct compensation, according to a PG&E filing with the Securities and Exchange Commission. Her 2017 pay package was 106 percent higher than the $4.2 million in total pay she received in 2016.
Williams took over as PG&E’s first female CEO in March 2017. Experts saw the appointment, weeks after PG&E was sentenced for felonies the company committed before and after a fatal explosion in San Bruno, as a way for the embattled utility to put the deadly disaster behind it. The 2010 explosion, caused by PG&E’s flawed record-keeping and shoddy maintenance, killed eight and destroyed a San Bruno neighborhood.
However, about five months after Williams — touted as an expert in electricity operations — took the reins as CEO, numerous wildfires roared through Wine Country and nearby areas. The blazes killed 44, destroyed an estimated 8,900 structures and caused at least $9.4 billion in insured damages.
One key focus of the fire investigations: the role, if any, that PG&E’s electricity system and equipment played.
Investigators have yet to determine the cause of any of the blazes. But the potential that PG&E’s aging electrical system could be linked to the fiery disasters has cast a forbidding shadow over the company’s financial outlook, quarterly results and stock market performance.
“The CEO’s direct compensation more than doubled in a year that was a safety disaster for the thousands of PG&E ratepayers and their families who lost their homes, or their livelihoods, or, tragically, loved ones, in the October firestorms” state Sen. Jerry Hill, a Democrat who represents portions of San Mateo and Santa Clara counties, said Tuesday. “That leads me to believe that PG&E’s entire PR campaign, as well as their elimination of dividends, is designed just to sway public and legislative opinion so they can get a reprieve from the Legislature. If they were really hurting, she’d cut her compensation.”
Since Oct. 9, the first trading day after the fires began, PG&E’s shares have plunged 36 percent. During 2017, the CEO’s most recent compensation year, the company’s stock tumbled 24.5 percent. Since March 1, 2017, Williams’ first day as CEO, PG&E’s stock has nose-dived 32 percent.
In the SEC filing, PG&E said that multiple factors went into determining various components of an executive’s pay.
“Payout is based on total shareholder return relative to 14 peer companies selected by the compensation committee and achievement of safety and financial goals,” PG&E said in the SEC filing.
Much of Williams’ 2017 pay package was underpinned by a big increase in awards of stock options. PG&E granted stock options in 2017 to Williams valued at $6.5 million. That was 189 percent higher than the $2.3 million in stock options the company gave her in 2016.
Williams received nearly $992,000 in base salary in 2017, up 42.5 percent from 2016.
Nickolas Stavropoulos, chief operating officer and president of Pacific Gas and Electric, PG&E’s utility subsidiary, received $6.4 million in total direct compensation in 2017, up 88.9 percent from 2016. His compensation package included $4.3 million in awards of stock options and $778,000 in base salary.
San Francisco-based PG&E listed nine executives in the annual SEC filing. Six received total compensation increases.
The regulatory filing also detailed windfalls grabbed by several executives due to sale of previously awarded stock packages.
Anthony Earley, PG&E’s former CEO and Williams’ predecessor, saw a gain of $15 million from the sale of stock, the SEC filing showed. Earley retired at the end of 2017.
Other windfalls from the sale of stock options: Williams, $3.4 million; Stavropoulos, $3.2 million; Hyun Park, special counsel, saw a gain of $2.9 million.
“Any company worried enough about potential wildfire liability to take the drastic step of suspending dividends should be suspending salary increases to its executives, if not suspending their entire salaries,” said Mark Toney, executive director of The Utility Reform Network.