But others have expressed disappointment. Gov. Gavin Newsom called the board choices troubling this spring. Newsom said he’d expected to see a greater emphasis placed on changing the company’s safety culture.
"It's kind of curious that they went in really heavy on finance and bankruptcy people, because bankruptcy really doesn't seem to be the central challenge in front of PG&E," said Jared Ellias, who teaches bankruptcy and corporate governance at UC Hastings College of the Law.
Ellias said that the new board shows how the utility thinks that "the relationship with Wall Street is the most important set of expertise that they want to have."
In a statement to KQED, a PG&E spokesperson refuted the idea that Wall Street interests are too heavily weighted on the new board.
“The Board and our new CEO are focused on safety and operational performance and resolving the claims of those affected by the 2017 and 2018 wildfires,” PG&E wrote.
The company also noted that many of its new board members have executive experience at utilities.
Who’s On the Board?
Many of the new board members have a history with hedge funds that have been actively involved in efforts to shape PG&E’s future.
New board members include Richard Barrera, a former partner and co-portfolio manager at Redwood Capital Management, one of the three firms that, according to SEC filings, collectively held 10% of PG&E shares this spring, when the board overhaul and selection of current CEO Bill Johnson took place.
Another, Michael Leffell, once served as deputy executive managing member at Davidson Kempner Capital Management. Bloomberg reported that firm joined forces with other Wall Street heavyweights, Pacific Investment Management Co. and Elliott Management, in trying to sell state lawmakers on a plan to establish a fund for past wildfire victims. The investor group is one of several that have reportedly pitched various versions of such a fund, which wildfire victims’ attorneys say would unfairly cap the amount of liabilities PG&E owes their clients.
Hedge Funds Compete for Board Seats
The hedge funds involved have jockeyed for position since PG&E entered into bankruptcy protection in January.
While Redwood Capital Management, Abrams Capital Management and Knighthead Capital Management have held significant sway, another hedge fund — BlueMountain Capital Management — has successfully leveraged its smaller 2% stake.
In the runup to PG&E’s bankruptcy, BlueMountain Capital vowed a fight to replace PG&E’s entire board, even proposing its own slate, which included former National Transportation Safety Board head Christopher Hart. In April, PG&E hired Hart as a safety adviser reporting directly to the CEO.