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Perhaps the only people less worthy of receiving a bonus of any kind than the Moody's and S&P analysts who as recently as three weeks ago rated now bankrupt PG&

Perhaps the only people less worthy of receiving a bonus of any kind than the Moody's and S&P analysts who as recently as three weeks ago rated now bankrupt PG&E as investment grade is the management of PG&E, which one year after the most destructive fire in California history sparked, literally, another "most destructive fire in history" with no hedges or fallbacks in place. And yet as part of its first day bankruptcy motion, the California utility that filed for bankruptcy early on Tuesday is seeking to pay employees about $130 million in performance bonuses for last year, an amount which is due to be paid in March 2019. According to compensation and benefits court filing, the company - which is facing $51.7 billion in total debts - said that the bonuses "are critical to ensuring that employees stay motivated." About 14,000 employees are eligible for short-term incentive plan cash awards for 2018, for achieving performance targets and individual goals. The payouts range from about $5,000 to $90,000 per person, not including senior officers and directors. PG&E also said it wants to maintain a rewards program that gives gift cards to workers who go "above and beyond" their regular duties, at a total cost of about $15.2 million a year; the company is also seeking to pay out $650,000 in outstanding awards. In separate filings, PG&E said it will keep paying $327 million annually for pension benefits. The decision to keep paying into its pension plan means about 54,000 current and former employees are unlikely to be drawn into the bankruptcy case, company says in court papers. The utility also pays $109.2 million annually in 401(k) matching funds for 22,000 current employees and $28.3 million annually toward retiree health care, and has asked the court to keep such payments. Also of note, the company’s $5.5 DIP loan (which was arranged by J.P.Morgan, Bank of America, Barclays, Citi, BNP Paribas, Credit Suisse, Goldman Sachs, MUFG Union Bank and Wells Fargo) doesn’t set any deadlines for PG&E to sell assets or adopt a detailed reorganization plan, which gives the utility far more freedom than most companies operating in Chapter 11. In fact, one can almost claim that the only limitation imposed upon PG&E is for litigants to seek relief for the tens of billions in legal fees that they will be entitled to as a result of the deadly California fires.

lamarpye 8y ago
Interesting information. Do you know if the bonuses are part of the union contract? "Approximately two-thirds of PG&E’s employees are covered by collective bargaining agreements with three labor unions: the International Brotherhood of Electrical Workers (IBEW) Local 1245, the Engineers and Scientists of California (ESC) IFPTE Local 20 and the Service Employees International Union (SEIU) United Service Workers West." http://www.pgecorp.com/corp_responsibility/reports/2010/em06_unions.jsp http://www.pgecorp.com/corp_responsibility/reports/2010/em06... Maybe paying those bonuses is required.
as-j 8y ago
Woah there. You have 14,000 people that make the company go around, so let’s go after them and their families, their retirement, etc. These are the linemen who are out in storm to restore power, those maintain the comms system to keep the transmition system and grid running and the lights on, and 1000’s of other tasks. Surely in this group there are some that under perform, and some that over perform just like any company. Yes it’s a union shop, and I suspect you’ll find some insane union rules protecting people. You can disagree with the management, and say they should be the first against the wall. But why are the 14,000 the less worthy? Should we blame the 16,000 employees of Uber the next time Travis Kalanick opens his mouth? ;)
dfsegoat 8y ago
Santa Rosa, CA here. You have no idea how hard those PG&E workers busted their ass up here in Nor Cal during and after the Tubbs fire - a lot of them lost their own homes, and they were still out doing their jobs before the firefighters were even allowed to start doing their jobs 24 hrs in. On the gas side, they went to every house in the city - thousands of houses - and turned off gas, and then did the same thing to turn it back on. An army of workers went neighborhood to neighborhood just to make sure we didn't explode. Factor in that there were no hotel vacancies, and the PG&E workers were willing to live in their trucks with 4 other dudes for 2 weeks straight, and yeah - I think they should be compensated.
- wheelerwj 8y ago
  thanks for jumping in with this I think its a pretty rare case that an employer facing tens of billions in claims keeps paying into the comp plan and im pretty happy with PG&E right now. I think that likely its a good sign that they want to keep the employees motivated. one other thing OP talks about is that the payouts are up to 90k for senior members. that's a far cry from the millions that we see bank execs getting. I dont think we should treat this with such hostility.
  - drivingmenuts 8y ago
    Why should the senior execs get anything other than a pink slip and/or a very long look at the bad side of a prison cell door?
    - wheelerwj 8y ago
      frankly, because they were promised it. if we create scenarios where employers can skip out on paying due compensation to employees who have already performed the work then our corporate system would be even more rigged then it is. In the case of corporate governance, we hold board members accountable. not employees who do as they are paid.

lamarpye 8y ago

Interesting information. Do you know if the bonuses are part of the union contract? "Approximately two-thirds of PG&E’s employees are covered by collective bargaining agreements with three labor unions: the International Brotherhood of Electrical Workers (IBEW) Local 1245, the Engineers and Scientists of California (ESC) IFPTE Local 20 and the Service Employees International Union (SEIU) United Service Workers West." http://www.pgecorp.com/corp_responsibility/reports/2010/em06_unions.jsp http://www.pgecorp.com/corp_responsibility/reports/2010/em06... Maybe paying those bonuses is required.

as-j 8y ago

Woah there. You have 14,000 people that make the company go around, so let’s go after them and their families, their retirement, etc. These are the linemen who are out in storm to restore power, those maintain the comms system to keep the transmition system and grid running and the lights on, and 1000’s of other tasks. Surely in this group there are some that under perform, and some that over perform just like any company. Yes it’s a union shop, and I suspect you’ll find some insane union rules protecting people. You can disagree with the management, and say they should be the first against the wall. But why are the 14,000 the less worthy? Should we blame the 16,000 employees of Uber the next time Travis Kalanick opens his mouth? ;)

dfsegoat 8y ago

Santa Rosa, CA here. You have no idea how hard those PG&E workers busted their ass up here in Nor Cal during and after the Tubbs fire - a lot of them lost their own homes, and they were still out doing their jobs before the firefighters were even allowed to start doing their jobs 24 hrs in. On the gas side, they went to every house in the city - thousands of houses - and turned off gas, and then did the same thing to turn it back on. An army of workers went neighborhood to neighborhood just to make sure we didn't explode. Factor in that there were no hotel vacancies, and the PG&E workers were willing to live in their trucks with 4 other dudes for 2 weeks straight, and yeah - I think they should be compensated.

wheelerwj 8y ago
thanks for jumping in with this I think its a pretty rare case that an employer facing tens of billions in claims keeps paying into the comp plan and im pretty happy with PG&E right now. I think that likely its a good sign that they want to keep the employees motivated. one other thing OP talks about is that the payouts are up to 90k for senior members. that's a far cry from the millions that we see bank execs getting. I dont think we should treat this with such hostility.
- drivingmenuts 8y ago
  Why should the senior execs get anything other than a pink slip and/or a very long look at the bad side of a prison cell door?
  - wheelerwj 8y ago
    frankly, because they were promised it. if we create scenarios where employers can skip out on paying due compensation to employees who have already performed the work then our corporate system would be even more rigged then it is. In the case of corporate governance, we hold board members accountable. not employees who do as they are paid.