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by inferiorhuman 2442 days ago
They may as well shut down the company

As I said PG&E makes a really great case for municipal power.

There is no reason for them to be shouldering increased risk if the reward is reduced compensation.

Fire prevention reduces risk. Conversely, this reduced risk scenario you're talking about has resulted in PG&E going bankrupt twice this century.

As for exec compensation and buybacks, PG&E spends a few hundred million dollars annually buying back stock. The fire prevention budget doesn't need to be infinite, but $200-300 million would go a long way. KTVU identified three SVPs who make around $500,000 annually. Yes, that's not a ton of money compared to PG&E's income, but a couple extra million could easily pay for brush/fuel removal.

https://ycharts.com/companies/PCG/stock_buyback

http://www.ktvu.com/news/despite-bankruptcy-pg-e-executive-g...

Edit: Per the KTVU article, that half a mill per SVP is the base salary, so bonuses and non-cash compensation aren't included.
4 comments
PeterStuer 2442 days ago
Actually having a vital utility in private hands is a guaranteed recipe for getting service that is optimize for making the most profit rather than providing the best value.

You might be lucky in the honeymoon period where the company is still getting entrenched, but once that is over and getting them out again is not that easy, you will gravitate to minimal service, especially in areas that require investment, and being bled dry and fleeced for wathever they can.

Large risks that would require preventive maintainable or modernization to mitigate will be ignored as the company knows they will be bailed out should it come to that.

And all this because of the neoliberale dogma that the private sector is somehow always 'better' than the public sector.

In reality large. organization of equal size have the same efficiency problems, regardless of them being public or private sector. And before you point to a leaner small private champion in a competitive field you should systemically add the cost of the dozens or even hundreds of competitors they are 'beating'.

The advantage you have when things are not in the hands of the private sector is that you can prioritise ongoing quality and value of service provisioning over maximisation of short term profit extraction.

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Google234 2442 days ago
Cut their income in half and get 1.5 million which is 0.008% of PG&E's income. Then those three SVPs will leave and you will need to hire three more which won't be cheap. How much do you think a SVP in a company making 18 billion a year should be paid? That sounds like a lot of responsibility to me and the people qualified for the job will expect to be compensated accordingly. Anyway, I doubt you would come out in the green at the end of this pointless exercise.
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Dylan16807 2442 days ago
How many SVPs do you need?

And what makes you think you can't find a competent manager for $250k a year?

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ericd 2442 days ago
Because you can get much easier jobs that pay $250k? And because jobs at that level at other big companies frequently pay much more than the current $500k, even? Basically, you're going to get outbid for the people you want.
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Dylan16807 2442 days ago
Being a vice president doesn't seem particularly hard, as jobs go. The 99th percentile for income is $300k, and there's no way the difficulty even approaches that percentile.

Can you name some much easier jobs that pay that much?

You'll always be outbid for the absolute best, but I see no reason you wouldn't have plenty of viable candidates when you're offering >98th percentile income for a management job.

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ericd 2442 days ago
Being a developer at one of the big tech companies is much easier than being an SVP in a big org, as one example. From what I've seen, you need to be extremely type A to succeed as an SVP most places.
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Dylan16807 2442 days ago
That might pay $150k, which is significantly less.

Also being "extremely type A" doesn't sound like a difficulty, really. And I don't see how it justifies 99th percentile pay either.

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bfung 2442 days ago
It’s also one of few levers to hold executives accountable for their decisions and actions. The other being jail time.
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Google234 2442 days ago
So the salaries of the VPs of Human Resources or Finance should be cut? Anyway, most their salary is probably in stock options so it's already happened.
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bfung 2442 days ago
VPs are technically not executives. In a corporate structure, the Board of Directors and the their reports (CEO, Presidents, etc) are the ones actually making decisions and managing the company overall.

For example, the CEO of PG&E before 2019 was https://en.wikipedia.org/wiki/Geisha_Williams .

Here are the PG&E filings to the SEC: http://investor.pgecorp.com/financials/annual-reports-and-pr...

2017: http://s1.q4cdn.com/880135780/files/doc_financials/2017/annu...

2018: http://s1.q4cdn.com/880135780/files/doc_financials/2017/annu...

2019: http://s1.q4cdn.com/880135780/files/doc_financials/2019/05/2...

Ultimately, if something in a company goes wrong, the buck needs to stop at the CEO and if not CEO, the board of directors. In the end I guess only we shareholders are to blame.

For lower performance between 2016 and 2018, the CEO got a raises each year (snippet from 2019 page 81):

Name and Principal Position: Geisha J. Williams(a) Chief Executive Officer and President, PG&E Corporation

    year salary    bonus stock award                                    total
    2018 1,079,167 0     6,400,078    1,600,003 0       40,341  170,253 9,289,842
    2017 991,667   0     6,500,168    0         0       996,810 108,575 8,597,220
    2016 695,833   0     2,250,072    0         610,594 519,983 87,748  4,164,230
Check PG&E's stock performance between those years - the compensation does not match reality. I'm saying that these listed officers shouldn't be getting the compensation they are getting as it's not reflective of the health of the business they're running.
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inferiorhuman 2442 days ago
So the salaries of the VPs of Human Resources or Finance should be cut? Anyway, most their salary is probably in stock options so it's already happened.

I just quoted the base salary (a.k.a. cash) of three SVPs.

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Google234 2442 days ago
Well, that's not important my main point anyway (see my other comment) and it wasn't clear in the un-edited post.
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inferiorhuman 2440 days ago
it wasn't clear in the un-edited post.

The article I linked to stated very early on that it was discussing base salary.

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roenxi 2442 days ago
> As I said PG&E makes a really great case for municipal power.

So if a power pole is owned by the government it suddenly becomes non-flammable? That isn't based on the laws of physics.

There is a strategy that makes countries fantastically wealthy: only do things that are profitable. Running the energy grid for no profits is not a path to broad-based success, it only results in taxpayers paying for things that have no marginal value. If it makes sense with electricity then there is no logical reason not to try the same strategy with gasoline, food and shelter. At some point the damage goes critical and Venezuela happens.

Also, buybacks aren't primarily a form of executive compensation; I'm no expert but they look like a work-around for double-tax issues in the American income tax law. A buyback is a method of transferring money -> stock holders and in this context is basically just a dividend.

I've no idea what is going on in California, obviously, but strategies like 'nationalise it!', 'stop the capitalists raising prices!' and 'Stop people profiting from their investments!' are just classic arguments that hurt everyone in the long term. Literally caused societies to collapse in extreme cases.

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anoncake 2442 days ago
> If it makes sense with electricity then there is no logical reason not to try the same strategy with gasoline, food and shelter.

Those aren't natural monopolies.

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