PG&E says its incoming CEO will receive an annual base salary of $2.5 million plus stock awards worth at least $3.5 million a year, according to a filing with the U.S. Securities and Exchange Commission.
PG&E's New CEO in Line to Get at Least $6 Million in Compensation a Year
Bill Johnson, former head of the Tennessee Valley Authority, has committed to a three-year contract as PG&E's next CEO and will also receive a one-time $3 million "transition payment" on his first day of work, May 1 — a payment the company can take back if Johnson resigns or is terminated within one year of his start date.
PG&E pegs Johnson's stock compensation at $3.5 million a year based on a target PG&E share price set in late March and early April. Johnson would get part of the stock award each year simply for remaining in the CEO's job.
But 75 percent of the annual equity award would be based on a series of performance goals not described in the SEC filing. The company says that about two-thirds of that portion of the share award will be"subject to safety-based performance conditions," with the remainder tied to meeting financial and customer-service goals.
Failure to meet the safety goals and other targets would result in Johnson getting none of the performance-based stock award. Exceeding the goals could result in him getting 150 percent of his target payout.
Besides the yearly equity award, the company also granted Johnson an option to acquire millions of shares of PG&E stock — again, if the company meets its performance goals on his watch.
"We believe pay should be strongly tied to performance — particularly safety performance — and our compensation programs are designed to reflect this," PG&E said in a statement. "More than half of Mr. Johnson's incentive compensation will be directly tied to safety performance and metrics, which PG&E believes significantly exceeds industry standards. Like other companies, PG&E sets executive compensation to be comparable with similar companies in the industry. In our 2020 general rate case proposal, we are not asking that customers pay for any compensation for any company officer."
PG&E announced a major shake-up of its executive staff on April 3, when it appointed Johnson as CEO and president and named 10 new directors to its 13-member board.
The overhaul came as the company faces intense regulatory, legislative and legal scrutiny over its role in starting a series of catastrophic wildfires.
PG&E's filed for Chapter 11 bankruptcy protection in January, saying it faced at least $30 billion in potential wildfire liability costs. PG&E's former CEO, Geisha Williams, stepped down shortly before the announcement, and was replaced by interim CEO John Simon.
The utility said in February that it's "probable" investigators will rule that its equipment caused last November's Camp Fire in Butte County. The blaze killed 85 and destroyed more than 14,000 homes in and around the town of Paradise, making it the deadliest and most destructive fire in the state's history.
PG&E faces hundreds of lawsuits arising from that blaze and from fires that swept parts of Northern California in October 2017. The company is also reported to be the subject of a criminal probe by a Butte County grand jury.
Johnson is no stranger to controversy. He announced his upcoming retirement from the TVA, a federally operated power agency, in November, about a week after a federal jury found that a TVA contractor, Jacobs Engineering Group, had endangered workers during a toxic coal ash cleanup in Kingston, Tennessee.
More than 40 workers involved in that cleanup died and hundreds more were sickened. Jurors found that Jacobs is liable for exposing workers to toxic dust in the cleanup.
Johnson was not head of the TVA at the time of the December 2008 spill, but much of the cleanup took place on his watch.
This story contains reporting from The Associated Press.