Judge OKs bankrupt PG&E's plan for $235 million in bonuses

[TexasTowelie]

SAN FRANCISCO (AP) — A federal judge approved Pacific Gas & Electric Corp.'s plans Tuesday to pay $235 million in employee bonuses this year, despite the California utility's bankruptcy and objections from lawyers of victims of the state's massive wildfires.

The Sacramento Bee reports that U.S. Bankruptcy Judge Dennis Montali approved the plan at a hearing in San Francisco. His ruling came two weeks after he delayed a decision, saying he needed more information from PG&E about the thresholds employees would need to meet to qualify for the bonuses.

Pacific Gas and Electric Co. said the payments would be heavily weighted toward achieving safety goals and were needed to promote stability in its workforce amid the chaos surrounding the company. The payments will not go to senior management but be given to about 10,000 rank-and-file employees, the newspaper reported.

PG&E has said the bonus program was restructured with its Chapter 11 case in mind.

Read more: https://www.beaumontenterprise.com/news/us/article/Judge-OKs-bankrupt-PG-E-s-plan-for-235-million-13789930.php

[OneBro]

1. There's a devil in the details.

Makes it a bit more palatable that reportedly the "payments will not go to senior management but be given to about 10,000 rank-and-file employees." However, $235 million divided by 10k is $23,500 each. What "rank and file" employee is bringing in that kind of a bonus? I suspect there's a devil in the details.

[TexasTowelie]

3. Engineers and IT staff could be in that group.

I don't know salary ranges for California, but if they are making around $150K, then it amounts to about 15% bonus. That isn't an extraordinary retention bonus to keep people on staff, particularly if they are also working overtime or if they see the writing on the wall and know that their jobs may be eliminated.

[OneBro]

4. Ah. That makes sense. Thanks for the follow-up!

[Auggie]

2. Promote stability in its workforce? Or morale boost / recruit mechanism?

10,000 "rank and file" employees get "incentives" to meet "safety goals." But that's $235 million not for victims. Or burying power lines. Or upgrading technology.

[OneBro]

5. That was my first thought, but . . .

. . . if the company completely fails because "rank and file" employees decide to jump ship, resulting in a potential loss of billions, the $235 million retention bonuses suddenly make sense.

At least, that's what I suspect was the court's reasoning.

[Auggie]

6. Then it is a type of recruitment and morale builder ...

companies don't give performance bonuses unless they want people to stay.