Top PG&E employees likely to receive bonuses
SAN FRANCISCO (AP) – More than 200 top managers and employees of California’s largest utility will share a $17.5 million bonus, as long as the utility proves to a federal bankruptcy judge that it will lose key employees if it does not award the extra money.
Judge Dennis Montali also asked Pacific Gas and Electric Co. to declare in writing that the cash-strapped utility will not use the bonuses as a reason to ask state energy regulators for further electric rate hikes.
Montali tentatively approved the bonuses Monday despite opposition from groups that say the utility should pay off its debts to other creditors first.
”I am not in the business of second guessing the business judgment of the debtor,” Montali said. ”These are the kinds of things that generally happen in bankruptcy cases.”
Jim Lopes, an attorney for PG&E, said the extra money will let the utility maintain its day-to-day operations as it navigates bankruptcy proceedings and the state’s power crisis.
Montali asked that PG&E give him a list of the titles and dollar amounts of the top 23 recipients, as well as evidence that employees have left or have planned to leave since the company filed for bankruptcy protection April 6.
Montali also wanted to know why the utility chose to award bonuses rather than stock options, which could have come from PG&E’s parent corporation.
Irving Sulmeyer, an attorney representing the city and county of San Francisco, called Montali’s tentative decision ”unfortunate” and said the utility should first pay its debts to the more than 50,000 businesses, cities and individuals to whom it owes money.
”At the same moment that they don’t have money to buy electricity, they have money to award bonuses,” Sulmeyer said.
Employees will begin receiving the bonuses as early as April of 2002. PG&E’s six senior officers – its president and five senior vice presidents – won’t receive a bonus until the utility files its financial reorganization plan.
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