PG&E key employee incentive plan denied approval by bankruptcy court

By Caroline Salls

Pittsburgh, Sept. 3 – PG&E Corp.’s motion for approval of a key employee incentive plan was denied Friday by the U.S. Bankruptcy Court for the Northern District of California.

PG&E said in the motion filed in June that the program would pay incentive-based compensation to participants based on near-term safety, operational and financial goals.

Under the incentive plan 12 to 14 officers would have been eligible to collectively receive incentive-based compensation awards with an estimated total target value of $10.9 million. The order said the plan would have paid $5.4 million to $16 million to eligible employees.

The company said actual payouts would depend on performance achieved in 2019, PG&E’s stock price at the time any awards are settled and the compensation bands of the individuals who are eligible to be plan participants.

The potential awards consist of 50% cash and 50% performance-based restricted stock units, with the stock unit component being settled in cash or stock at the board of directors’ election.

In Friday’s order, judge Dennis Montali said “The court concludes that debtors have not shown the KEIP to be primarily incentivizing, and thus it does not pass muster” under applicable bankruptcy laws.

The electric and natural-gas utility is based in San Francisco. The company filed bankruptcy on Jan. 29, 2019 under Chapter 11 case number 19-30088.

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