6 things to know about the PG&E bankruptcy filing and how it affects you
PG&E canceled $130 million in bonuses to thousands of employees Friday, telling them it couldn’t justify the payments when wildfire survivors are facing “significantly greater” hardships.
The bonus plan had come under intense criticism after PG&E filed for Chapter 11 bankruptcy protection in late January in the face of an estimated $30 billion in potential liabilities owed to wildfire survivors. Some creditor groups were protesting the decision and urging the bankruptcy judge to halt the payments.
“We recognize the hardship on our people, and we don’t take that lightly,” interim CEO John Simon said in a memo to employees. “But we believe as a whole that the hardships on others are in many cases significantly greater.”
PG&E workers howled at the decision to eliminate the payments under the short-term incentive plan, or STIP.
“The union believes that zeroed out STIP payments for rank and file employees do nothing to address the terrible losses of fire victims. Nor should employees’ earned compensation for the ongoing and essential work done at PG&E be confiscated by management as a symbolic gesture to offset the bankruptcy’s harm to creditors,” said John Mader, president of Local 20 of the Engineers and Scientists of California. The local represents 1,200 utility employees who were expecting the payments in mid-March.
The union said the bonuses can amount to 10 percent of a worker’s annual pay. The bonuses are based on 2018 performance, and Simon wrote in his memo: “Considering the impacts of the wildfires, should we be paying ourselves for our performance last year? We felt the answer was no.”
Simon added that PG&E plans to ask the bankruptcy judge to approve a new bonus program for 2019 performance, with the first payout coming in April.
PG&E has been blamed by Cal Fire for at least a dozen of the October 2017 fires in the wine country and Sacramento Valley. The agency is investigating whether a faulty transmission tower caused the Camp Fire, which killed 85 people and destroyed much of the town of Paradise in November.