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PACIFIC GAS AND ELECTRIC COMPANY
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Pacific Gas and Electric Company
Joint Notice of 2021 2023 Annual Meetings
Joint Proxy Statement Thursday, May
20, 202118, 2023
PG&E Corporation and Pacific Gas and Electric Company
PROXY GUIDE
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PROPOSAL3: ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION FOR PG&E CORPORATION AND PACIFIC GAS AND ELECTRIC COMPANY | |
PROPOSAL4: RATIFICATION OF THE APPOINTMENT OF DELOITTE AND TOUCHE LLP AS THE INDEPENDENT PUBLIC ACCOUNTING FORM FOR PG&E CORPORATION AND PACIFIC GAS AND ELECTRIC COMPANY | |
| Report of the Audit Committees | |
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| PG&E Corporation
Pacific Gas and Electric Company |  |
April 6, 2023 Dear Shareholders, |
April 8, 2021
Dear Shareholders,
After
We are proud of the progress PG&E1 has made over the past year as we deliver on our Triple Bottom Line of serving People, the Planet, and California’s Prosperity.
First and foremost, we are working to reduce risk and improve safety as we endeavor to rebuild trust with our customers and the hometowns we serve.
Our wildfire mitigation strategy now features multiple layers of protection, starting with system hardening, vegetation management, inspections, and repairs. When conditions warrant, we activate our Enhanced Powerline Safety Settings and, as a last resort, our Public Safety Power Shutoff program. With these layers of protection, we estimate we have reduced wildfire risk by 90-plus percent, and we continue to look for innovative technologies to address the remaining risk.
Longer term, our program to underground 10,000 miles of powerlines is the foundation of our wildfire risk reduction. It is a Triple Bottom Line case in point, providing the highest level of risk reduction for our customers’ dollar while preserving more trees than our current approach. In 2022, we made tangible progress, burying 180 miles—exceeding our target and doubling our total from the prior year—and received legislative support for our overall goal.
In Gas Operations, we recorded our lowest pipeline damage rate ever and ranked third in the nation among large gas companies for best safety performance. And at Diablo Canyon Power Plant, rated as exemplary for its operational performance, we received state and federal support to pursue an extension of the plant’s operating licenses.
While we see Diablo Canyon as a centurycornerstone of greenhouse gas (GHG)-free electric reliability in California, we continue to bolster our suite of capabilities in building climate resilient infrastructure.
In 2022, we added significant battery storage to our energy mix, including the Elkhorn Battery at Moss Landing, one of the largest utility-owned, lithium-ion battery energy storage systems in the world. We also took the first steps in making bidirectional electric vehicle charging a reality in California, a technology with the potential to power customers’ homes and provide energy back to the grid during times of peak energy demand.
Of course, our climate strategy is not just about guarding against the risks and realities of our changing climate, with hotter, drier summers and more severe winter storms. We are shifting from thinking only about net zero—or do no harm—to a climate positive strategy. Our new climate commitment is that by 2050 PG&E will begin removing more GHG from the environment than we emit. We are standing for doing our part to heal our planet.
As a signal that we are on our way, 96 percent of the electricity delivered to our customers in 2022 came from GHG-free resources, and 40 percent from state-qualified renewables such as solar and wind.
Overall, our progress is rooted in a standards-based operating system centered around our customers. We continued to mature our Lean operating system in 2022, driving better visibility, more effective decision making and faster problem solving. We also continue to see the benefits of our regional service model, with key leaders in each of our five regions strengthening local relationships and addressing local needs.
Even with this progress, we know there is much more to do. We will never be satisfied in our work to deliver energy that is safe and reliable for the People we serve, that supports a healthy Planet for all, and that fosters Prosperity in our hometowns throughout Northern and Central California,California.
Today, we and our 26,000 coworkers are writing the
year 2020 brought PG&E(1) to a turning point unlike any other in our history.Together, PG&E Corporation and its subsidiary, Pacific Gas and Electric Company, took responsibility for a series of devastating wildfires caused by our electric equipment, including the 2018 Camp fire. The Utility pleaded guilty to involuntary manslaughter in the deathsnext chapter of the 84 people who lost their lives in that tragedy. We settled billions of dollars in damage claims by fire victims, as well as by cities, counties, and other public entities.
We concluded an 18-month Chapter 11 proceeding while fending off hostile takeover attempts. And we emerged with a plan of reorganization that includes strong commitments regarding our corporate governance, operations, and financial structure — forged with guidance from both the California Governor’s Office and our state regulator — that are designed to further prioritize safety. Now, under the leadership of PG&E Corporation CEO Patricia K. Poppe and substantially new Boards of Directors, we are embarked on a new era for PG&E, charting a new path toward a brighter future as a different enterprise—one that we expect will provide better outcomes and more sustainable results for all those who depend on us.
Yet we will not forget the hard lessons we have learned. Rather, we will use them as a driving force for continuous improvement, accountability, and sustained performance in the work we do every day. Earning back the trust we have lost will require us to meet each one of our obligations and deliver on our promises, without fail.
Overall, we believe that the course we have set will position PG&E as a sustainable, financially sound energy business with the appropriate governance and oversight to safely serve our customers for the long-term, while also making the investments required to help the State achieve its climate and clean energy goals.
Accordingly, we have recommitted our support for California’s climate leadership, including electrification of the energy grid, a charging network sufficient to power millions of electric vehicles, and a carbon-neutral economy by 2045.story. We are adapting our systemsglad to climate risks, particularly the rising threat of wildfires and extreme weather. And we are doing sohave you with the recognition that both the costs and benefits of these innovations must be shared equitably across the economic spectrum.
Within our own organization, we are responding to calls for racial equity by deepening PG&E’s long-standing dedication to diversity, inclusion, and equal opportunity in the workplace, while intensifying our focusus on the health and safety of our customers, workforce, and communities.
As we pursue that vision, we understand that our success will be measured in tangible results, not intentions, pledges, or words. We welcome your feedback on our progress in the days ahead.
Sincerely,
Robert C. Flexon
Chair of the Board, PG&E Corporation
this journey. (1) | | | | | | | | |
Sincerely,
Robert C. Flexon Chair of the Board PG&E Corporation | |
Patricia K. Poppe Chief Executive Officer PG&E Corporation |
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1“PG&E” or “companies” refer to both PG&E Corporation and its subsidiary, Pacific Gas and Electric Company, or the “Utility.” |
PG&E Corporation
Pacific Gas and Electric Company
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April 8, 2021 Dear Shareholders,
Shortly after joining PG&E Corporation as the company’s new CEO, I shared a favorite song with my 23,000 coworkers. It’s one of those “oldie but goodie” classics — a single released in 1970 by the Five Stairsteps. Like so many popular tunes, the lyrics don’t scan on paper as well as they pair with music. But when times are tough, their upbeat message never fails to help me get through:
Oooh, …child
Things are gonna get easier
Oooh, …child
Things are gonna get brighter
We all know that PG&E has been through its own tough times over the past few years. Bankruptcy. Wildfires. Season after season of extreme weather events. And like everyone, the COVID-19 pandemic.
But things will get better. And we at PG&E are going to be part of making the future brighter for everyone who relies on PG&E, as measured by our “Triple Bottom Line” of people, planet, and prosperity.
People, because providing safe and affordable energy to those we are privileged to serve is the reason we exist. Planet, because doing so in a way that does no harm to the environment that sustains us is our solemn responsibility. Prosperity, because the special business charter we enjoy comes with a social duty to help our economy grow and thrive.
Already, we are delivering results across all three.
In the people category, we are assembling a diverse new team of senior leaders skilled in the kind of organizational design, standards, and processes that will enable us to deliver a “hometown service” experience for our customers and communities — one tailored to the specific local needs within our distinctive geographic regions.
For the planet, we are meeting California’s clean energy and climate goals, while continuing to look aggressively for new ways to reduce our carbon footprint.
And in support of prosperity, we successfully executed the sale of our transmission tower wireless licenses, yielding $973 million in initial proceeds —roughly half of which we intend to return to customers in the form of lower rates — and significantly reducing our 2021 equity needs.
The Triple Bottom Line will continue to guide our decision-making in the months and years ahead, underpinned by a relentless focus on performance. Only by keeping our promises and doing what we say we will do can we earn back trust and become the enterprise that all of our stakeholders deserve.
Unlike the Five Stairsteps, I don’t know how to create an inspirational song. But I do have a passion for creating the playbook for a great energy business, and that’s what we’ll be writing here at PG&E — for our customers, our coworkers, and our investors.
Sincerely,
Patricia K. Poppe
CEO, PG&E Corporation
“OOH CHILD” lyrics by Stan Vincent.
Used by Permission of Sony Music Publishing (US) LLC. All rights reserved.
Senior Leadership TeamJoint Notice of 2023 Annual Meetings of Shareholders of
PG&E Corporation and Pacific Gas and Electric Company
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| Patricia K. Poppe | | Adam L. Wright | |
| Chief Executive Officer,
PG&E Corporation | | Executive Vice President, Operations and
Chief Operating Officer
Pacific Gas and Electric Company |
| Proposals to be Voted On | | Corporation | | Utility | | Recommendation |
| 1 | Election of Directors (nominated by the Boards) | | | | | | |
| Cheryl F. Campbell | | • | | • | | FOR |
| Kerry W. Cooper | | • | | • | | FOR |
| Arno L. Harris | | • | | • | | FOR |
| Carlos M. Hernandez | | • | | • | | FOR |
| Michael R. Niggli | | • | | • | | FOR |
| Sumeet Singh | | | | • | | FOR |
| Benjamin F. Wilson | | • | | • | | FOR |
| 2 | Advisory Vote to Approve Executive Compensation | | • | | • | | FOR |
| 3 | Advisory Vote on the Frequency of the Advisory Vote to Approve Executive Compensation | | • | | • | | FOR ONE YEAR |
| 4 | Ratification of the Appointment of Deloitte and Touche LLP as the Independent Public Accounting Firm | | • | | • | | FOR |
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| Meeting Information |
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| Date: May 18, 2023 Time: 10:00 a.m. Pacific Time Location:Virtual Meeting2 | | Record Date Shareholders as of March 20, 2023, are entitled to vote at the Annual Meetings. | | Solicitation of Proxies The Boards of Directors are soliciting proxies from you for use at the Annual Meetings or any adjournments or postponements. Proxies allow designated individuals to vote on your behalf. |
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| | | | | Voting Your Shares — Your Vote is Extremely Important |
|  | |  | The deadline to vote is: 11:59 p.m. Eastern Time on May 17, 2023, or
11:59 p.m. Eastern Time on May 15, 2023, if you are a participant in PG&E’s 401(k) Plan. |
| Marlene Santos | | Julius Cox | |
| Internet | Executive Vice President and
Chief Customer Officer
Phone | Proxy Card by Mail | 2023 Annual Meeting |
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(1) | Appointed as the PG&E Corporation Executive Vice President and Chief Financial Officer on March 21, 2021. |
Joint Notice of 2021 Annual Meetings of Shareholders of PG&E Corporation and Pacific Gas and Electric Company
| Items to be Voted On | | Corporation | | Utility | | Recommendation |
1 | Election of Directors | | 6 Nominees | | 7 Nominees | | |
| Cheryl F. Campbell | | X | | X | | FOR |
| Kerry W. Cooper | | X | | X | | FOR |
| Arno L. Harris | | X | | X | | FOR |
| Michael R. Niggli | | X | | X | | FOR |
| Oluwadara J. Treseder | | X | | X | | FOR |
| Benjamin F. Wilson | | X | | X | | FOR |
| Adam L. Wright | | | | X | | FOR |
2 | Ratification of Deloitte andTouche, LLP as the IndependentPublic Accounting Firm | | X | | X | | FOR |
3 | Advisory Vote on Executive Compensation | | X | | X | | FOR |
4 | Management Proposal to Approvethe PG&E Corporation 2021Long-Term Incentive Plan | | X | | | | FOR |
Your Vote is Extremely Important
April 8, 2021
Brian M. Wong
Corporate Secretary
PG&E Corporation
Pacific Gas and Electric Company
Meeting Information
Date: May 20, 2021
Time: 10:00 a.m. PDT
Location: Virtual Meeting(1)
Record Date
Shareholders as of March 22, 2021, are entitled to vote at the Joint Annual Meetings.
Voting Your Shares
You can vote over the Internet, by phone, by returning the proxy card by mail, or virtually at the 2021 Annual Meetings. The deadline to vote is 11:59p.m. Eastern Time on May 19, 2021, or 11:59p.m. Eastern Time on May 17, 2021, if you are a participant in PG&E’s 401k Plan.
Solicitation of Proxies
The Boards of Directors are soliciting proxies from you for use at the Annual Meetings or any adjournments or postponements. Proxies allow designated individuals to vote on your behalf.
IMPORTANT NOTICE OF AVAILABILITY OF 20212023 PROXY MATERIALS FOR THE JOINT ANNUAL MEETINGS: We are making the Joint Proxy Statement and form of proxy available to shareholders starting on or about April 8, 2021.6, 2023. The Joint Proxy Statement and 2022 Annual Report are available at investor.pgecorp.com/financials/annual-reports-and-proxy-statements.annual-reports-and-proxy-statements. Detailed information on how to vote your proxy is included in the “User GuideGuide” at the end of this Joint Proxy Statement. | |
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2 Holders of PG&E Corporation shares can access the 2023 Annual Meetings, vote, and ask questions at virtualshareholdermeeting.com/PCG2023. Holders of Utility shares can access the 2023 Annual Meetings, vote, and ask questions at virtualshareholdermeeting.com/PCG-P2023.
(1) | Due to the COVID-19 pandemic, the 2021 Annual Meetings will be virtual to protect the health and safety of our shareholders, customers, and employees. Holders of PG&E Corporation shares can access the 2021 Annual Meetings, vote, and ask questions at www.virtualshareholdermeeting.com/PCG2021. Holders of Utility shares can access the 2021 Annual Meetings, vote, and ask questions at www.virtualshareholdermeeting.com/PCG-P2021. | | | | |
20212023 Joint Proxy Statement | 1 |
Executive Summary
This executive summary highlights information to assist you in your review of the Joint Proxy Statement. The summary does not contain all of the information that you should consider, and you should read the entire Joint Proxy Statement carefully before voting.
Voting Roadmap
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| Proposal 1: Election of Directors | | Elect the following directors to serve on the Boards of Directors until the 2024 Annual Meetings of Shareholders. 1.Cheryl F. Campbell 2.Kerry W. Cooper 3.Arno L. Harris 4.Carlos M. Hernandez 5.Michael R. Niggli 6.Benjamin F. Wilson 7.Sumeet Singh (Utility Board only)
| | Each Board’s Recommendation: FOR each nominee
Our Board is: Qualified: Top skills include safety, utility operations, wildfire prevention, financial analysis, and renewable energy, and Committed to serving the long-term interests of shareholders. Director biographies are on page 14, and diversity and skills matrices on page 22 and 23. |
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| Independent | | | Diverse |
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| 93% Board members at Corporation | | 87% Board members at Utility | | | 57% Board members at Corporation | | 60% Board members at Utility |
| are independent under NYSE definitions | | | are either women or racially and ethnically diverse |
TABLE OF CONTENTS
20212023 Joint Proxy Statement | 2 |
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| Proposal 3: Frequency of Advisory Vote to Approve Executive Compensation (Say When on Pay) | | Approve an advisory vote that the frequency of the advisory vote on executive compensation be one year. | | Each Board’s Recommendation: FOR the advisory approval
Additional information on page 85. |
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| Proposal 4: Appointment of the Independent Auditor | | Ratify the appointment of Deloitte and Touche LLP (D&T) as PG&E’s independent registered public accounting firm for the year ending December 31, 2023. a.D&T is an internationally recognized firm, with deep knowledge of our industry and specific understanding of the California regulatory structure. b.The team within D&T rotates periodically to provide a fresh look at our controls. c.The Audit Committees oversee the selection of D&T after a careful review.
| | Each Board’s Recommendation: FOR ratifying the appointment of Deloitte and Touche LLP
Additional information on D&T can be found on page 86. |
Our Values
OVERVIEW
PG&E Corporation and Pacific Gas and Electric Companythe Utility together provide 16 million Californians with combined natural gas and electric utility service.service to approximately 16 million Californians—4.5 million and 5.5 million customer accounts, respectively. Our primary purpose iscustomers are at the heart of everything we do and why we strive to provide safe, reliable, affordable, and clean energy to our customers. Our customershometowns every day. They also look to us for grid innovation, clean energy technology, and support in achieving our state’s zero carbon goals.3
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70,000 SQUARE MILES Service area | |
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| 16 MILLION Customers served | | 26,000 Approximate number of employees | | 4.79 BILLION DOLLARS Procured from diverse suppliers |
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| 96% Greenhouse gas-free clean electricity4 | | 40% Estimated customer energy demand met by eligible-renewable resources5 | | 700,000+ Total number of interconnected private solar customers |
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| 50,000+ Total number of customers with battery storage at their homes or businesses | | 675,000 METRIC TONS of CO2 avoided through our customer energy efficiency programs | | 29,000+ HOURS of employee volunteer time |
3 The information in this section represents information for, or as of the end of, 2022, except where otherwise noted. Numbers have been rounded for presentation purposes. Information provided in graphics is qualified by descriptive language provided elsewhere in this section, if applicable.
4 Greenhouse gas-free clean resources include renewables, nuclear, and large hydroelectric power.
5 Eligible-renewable resources include bio power, geothermal power, small hydroelectric, solar, and wind power.
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| 2023 Joint Proxy Statement | 4 |
WHERE WE ARE HEADED
Our values,purpose—delivering for our hometowns, serving our planet, and leading with love—is underpinned by a strong focus on safety, People, Planet, and California’s Prosperity. With our true north strategy as the guidepost, our organizational design and regional service model are bringing us closer to the hometowns we serve. We restructured our service area into five regions—with leaders in each region to deliver improved public and employee safety, customer service, and operational reliability outcomes. And we are committed to designing an electric system that is resilient to climate change, decarbonized, and optimized to local and system needs.
We are building a culture of performance and continue to implement our Lean operating system, a core and foundational component of PG&E’s Performance Playbook. By focusing on four Lean Plays designed to transform performance—visual management, operating reviews, problem solving, and standardization—we completed implementation of the companies’ daily-weekly-monthly operating review process while aligning all levels of the organization around key performance indicators focused on safety, people, planet,delivery, cost, quality, customer, and California’s prosperity, shapecoworker morale. Additionally, we introduced a standardized problem solving process that allows all coworkers to identify, contain, and solve breakdowns in performance at the wayroot cause. This was accomplished in part by delivering direct Lean training, coaching, and support to our coworkers.
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| Visual Management | Operating Reviews | Problem Solving | Standardization |
We make decisions through a framework that prioritizes safety for everyone, rewards actions that prevent wildfires, and leads to a future carbon-neutral energy system, but we
approachknow that our
challengeswork to improve is never done. For more information about performance and
opportunities.Safety
Protectinghow it impacted pay, please refer to page 40.
Our commitment to safety is always at the safetyforefront of everything we do. We are focused on keeping the public, our co-workers, and contractors must come before anything else, all the time, everywhere. Our goal is to continually reduce risk to keep our customers, the communities we serve,coworkers, and our workforce (co-workerscontractors safe. This commitment extends to all our operations, but it begins with the reduction of wildfires. We are exploring the tools available to us, including short-term Public Safety Power Shutoff (PSPS), Enhanced Powerline Safety Settings (EPSS), vegetation management, system hardening, and contractors) safe. Our focus is on continuously building an organization whereundergrounding. Additionally, we are seeing positive outcomes with PG&E’s adaptive and systematic risk mitigation approach; specifically, we have designed everyachieved substantial reduction in acres impacted by Utility equipment-caused fires in 2022, relative to the prior three years (2018–2020).
Operational safety is a central component of how we measure success and reward performance. Several of our safety-related key performance indicators exceeded their targets in 2022, and we continue to set aggressive goals in 2023 in the spirit of continuous improvement. For our coworkers and our contractors, our belief is that we can design work activityactivities to facilitate safe performance, every memberperformance. We hold our contractors to the same standards with a Contractor Safety Program that emphasizes safe practices. We cannot be successful unless our coworkers feel safe to raise concerns; we continue to encourage and engage our coworkers and leaders to speak-up for safety. We have an annual speak-up award that recognizes employees for raising concerns and positively impacting our culture.
However, with all of our
workforce knows and practices safe behaviors, and every individual is encouraged to speak up and stop work if they see unsafe or risky behavior, and has confidence that their concerns and ideas will be heard and pursued. Our performance during the past few years has fallen short of that aspiration.focus on coworker safety, we are not satisfied with our occupational safety performance. We are
committedcommitting to
significantly improving our safety performancedo more to reduce injuries and injury potential in 2023 by strengthening our risk-based focus, so we understand our risks, prioritize our work, and use controls to reduce them,
while continuously measuring and
continuously measure and improveimproving risk reduction. We are creating a culture in which we hold each other accountable for safety, resolve issues promptly, and have engagement at all levels.
People
PG
&E Corporation’s and the Utility’s&E’s human capital
resourcemanagement objectives are to build
and retain an engaged, well-trained, diverse, and
equitableequitably paid workforce.
We provideattract and retain coworkers with stable, benefits-paying jobs, forprofessional development, and growth opportunities paired with our co-workers, and promotefocus on health, wellness, work-life balance, teamwork, and an abilityjoy at work. We want our coworkers to perform well for our customers. We offer:feel known, loved, and proud.
OUR WORKFORCE IS STRONG
Approximately 15,000 employees of 24,000 are covered by collective bargaining agreements. Forty-two percent of our employees have a tenure of more than 10 years.
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• Medical, health, and wellness plans, health screenings, and coaching.
• Employee Assistance Programs that help support mental health and offer confidential counseling.
• Peer volunteer programs that support co-workers who are in long-term recovery from substance use disorders.
• 401(k) retirement plans.
• Life and accident insurance.
• Free financial counseling.
• We create careers for our co-workers:
• PG&E Academy develops PG&E’s next leaders.
• We fund major reskilling initiatives when our operations change, such as when we began to decommission our Diablo Canyon Power Plant.
• We operate thirty-one apprenticeship programs to reduce barriers to entry for prospective employees.
• We create opportunity with PowerPathway, an innovative program designed to enlarge the talent pool of local qualified diverse candidates for skilled craft and utility jobs. PowerPathway helps people, including women and military veterans, prepare for high demand jobs in the utility and energy industry by providing eight weeks of training necessary to compete for in-demand jobs. Ninety-three percent of our PowerPathway graduates (including women and veterans) find industry jobs.
20212023 Joint Proxy Statement | 35 |
We maintain and are building on leading Diversity, Equity, and Inclusion (DEI) programs:
| • | Forty-six percent of our co-workers are ethnic minorities, twenty-seven percent are women and seven percent are military veterans. | | |
| Our Workforce Is Strong |
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We disclose detailed race, ethnic,have built strong Diversity, Equity, Inclusion, and Belonging (DEIB) programs that foster a diverse, equitable, and inclusive culture and workforce. |
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| Our workforce offers diverse perspectives | Our coworkers represent five generations, most of whom are Millennials, Gen X, and Boomers6 |
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Racial and gender workforce statistics ondiversity among our website.middle management | | Racial and gender diversity among our executives and senior management | | Racial and gender diversity among PG&E Corporation's executive officers |
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| • | Sixty percent of our management is racially or gender diverse. |
| • | We support fourteen employee resource groups15 Employee Resource Groups (ERGs) and have won multiple awards for diversity, equity, and inclusion leadership. Our ERGsEngineering Network Groups (ENGs) that hosted 80 programs in 2020 ranging150 virtual events. The discussions ranged from professional development series to intersectional presentations on identity and bias, including discussionssome featuring members of PG&E’sour Boards of Directors. |
| • | The Diversity Council is chaired by PG&E Corporation’s CEO and includes representatives from our ERGs and Engineering Network Groups as well as our Diversity Champions. |
| • | We consistently participate in external partnerships in support of building a diverse workforce with the Our National Society of Black Engineers SocietyENG president was recognized with the “Above and Beyond” Honorable Mention award for Affinity Group Leadership by Seramount, a leading organization promoting DEIB in the workplace. Also, our Latino ERG was recognized as "ERG of Hispanic Engineers,the Year" by Latina Style Magazine for their impact in leadership in support of Latino coworkers. |
| More than 120 scholarship awards totaling nearly $220,000 were made through scholarships created by our ERGs and Society of Women Engineers.ENGs. The winners received awards ranging from $500 to $6,000 for exemplary scholastic achievement and community leadership. |
We listen:
| • | We conduct biennial employee engagement surveys, quarterly pulse surveys,have scored 100 on the Corporate Equality Index by the Human Rights Campaign for 18 years straight. We also earned a spot in the “Best Places to Work for LGBTQ+ Equality 2022” by the Human Rights Campaign and voluntary upward feedback surveysa Disability Equality Index of 100 for the eight year by DisabilityIN. In 2022, we were named “Best-of-the-Best” Corporations for Inclusion by the National LGBT Chamber of Commerce and maintain a Corrective Action Program to support continuous improvement based on this feedback.Partners in the National Business Inclusion Consortium. |
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| Of technical, leadership, and coworker training provided by PG&E Academy | | Increase in virtual training in 2022 when compared to 2019, or pre-pandemic | | Apprenticeship programs that reduce barriers to entry for prospective employees |
6 Generational data refers to "Millennials" for individuals born between 1981-1996, "Gen X" between 1965-1980, and "Boomers" between 1946-1964.
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| 2023 Joint Proxy Statement | •6 |
| Our “Here to Help” hotline and health and wellness hotline provide 24/7 access. | | | | |
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| We conduct quarterly performance conversationscreate opportunity with employees.PowerPathway, an innovative workforce development program designed to help prepare a talent pool of local qualified diverse candidates, including women and military veterans, for high demand jobs in the utility and energy industry by providing eight weeks of training. In 2022, 94 percent of our PowerPathway graduates from three cohorts were hired by PG&E. We celebrated the 15th year of the PowerPathway program as well as the 50th cohort to graduate. More than 1,100 Californians have completed the program since its inception in 2008. |
Planet
California
PG&E has
long been ata longstanding commitment to serve the
forefront of protecting our planet, and
PG&E continueswe continue to actively embrace
our state’sCalifornia’s bold climate and clean energy goals.
There are many waysWe have a proven performance record on clean energy—and we
can be a force for good, and our size and scale enable PG&E to meaningfully address the growing threat of climate change.Our longstanding commitment includes aligning our resources and business strategy with California’sbelieve clean energy should be affordable for and inclusive of customers from all economic and social backgrounds.
With our new, longer-term climate goals,
and advocating for policies and programs that enable safe, reliable, and affordable clean and resilient energy for our customers. At the same time, we
are working to reduce the ever-growing risks posed by extreme weather and wildfires by incorporating forward-looking climate data into our asset management and decision-making today. These efforts are complementary and consistent — every action taken in climate mitigation also supports climate resilience.California has set an ambitious goal to achieve carbon neutrality by 2045. We embrace our foundational role in achieving this goal and transitioning California to a decarbonized and more climate-resilient economy. We are proud of our track record with renewable energy, exceeding California’s renewable portfolio standards goal for each utility (including the Utility) to deliver 33 percent of renewable energy by the end of 2020, and delivering clean electricity to our customers last year that was more than 88 percent greenhouse gas free. More than 535,000 of PG&E’s customers have adopted private rooftop solar and one in five electric vehicles in the U.S. plugs into PG&E’s grid. We are excited about the growth opportunities that a cleaner future presents for PG&E and our customers. We are also taking action to build a more climate-resilient energy network to ensure we can continue to deliver for customers including a strong push for more electric vehicles. We also believe clean energy alternatives should be affordable for and inclusiveeven as California continues to experience the impacts of all economic backgrounds.
In 2020, we:
climate change. • | Delivered some | | | | | | | |
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| Our Commitment: Helping to Heal the Planet PG&E is committed to helping to heal the planet through a pledge to achieve: •A climate- and nature-positive energy system by 2050. •A net zero energy system by 2040—five years ahead of the nation’s cleanest electricityCalifornia’s current carbon neutrality goal. •A series of 2030 climate goals to reduce PG&E’s operational carbon footprint and enable our customers with more than 35and communities to reduce their carbon footprints: •Reduce Scope 1 and 2 emissions by 50 percent from renewable sources — and we remain on track2015 levels •Reduce Scope 3 emissions by 25 percent from 2015 levels •Achieve Scope 4 goals to meetenable customer emission reductions | |
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Notes:
Scope 1: Direct emissions from PG&E’s operations.
Scope 2: Indirect emissions from facility electricity use and electric line losses.
Scope 3: Emissions resulting from value chain activities not owned or controlled by PG&E but that can be indirectly impacted by PG&E actions.
Scope 4: An emerging term for categorizing emission reductions enabled by a company. PG&E can make a significant contribution by enabling these emission reductions in our service area.
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| Our Progress As the state’s goallargest energy provider, we embrace our foundational role in transitioning California to a decarbonized and more climate-resilient economy. Today, one in every five solar rooftops in the country is in PG&E’s service area, and one in six electric vehicles in the nation plugs into PG&E’s grid. We are also partnering with a broad spectrum of 60 percent by 2030.stakeholders to create a pathway to a more equitable and affordable energy future. | |
• | Remained on track to meet the Million Ton Challenge, a voluntary goal to avoid one million tons of greenhouse gas emissions from our operations over five years. | |
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• | Helped customers avoid the emission of more than 534,000 metric tons of carbon dioxide through our energy efficiency programs – moving towards the state’s goal to double energy efficiency in existing buildings by 2030. This number is roughly equal to $308 million in energy bill savings. |
• | Awarded contracts for more than 1 gigawatt of battery energy storage, strengthening the state’s grid efficiency and reliability and reducing the need for additional fossil fuel generation plants. |
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Delivered clean electricity to Contents | |
• | Installed 4,180 Level 2 fast-charging ports for electric vehicles at workplaces and multi-family dwellings — withcustomers that was more than one-third in disadvantaged communities — and also offered programs to support medium- and heavy-duty fleets and public fast charging in support of the state’s goal of 10095 percent sales of light duty zero emission vehicles by 2035. |
•greenhouse gas emissions-free | | Brought the total number of interconnected private solar customers to more than 500,000.700,000 | | Awarded contracts for more than 3,300 MWs of battery energy storage to be deployed over the next several years |
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Installed approximately 340 charging ports for electric vehicles at schools, parks, public charging locations, and in support of fleets—with nearly half in disadvantaged communities | | Supported more than 18,60050,000 customers who have installed battery storage at their homes or businesses often paired with a solar power system. |
• | Further integrated climate change adaptation planning into our risk management processes. | Helped customers avoid emissions and energy costs through robust energy efficiency programs |
We are focused on protecting and preserving California’s natural beauty
As one of California’s largest private landowners, we are committed to protecting threatened and endangered species and their habitats and safeguarding watershed lands. We continue to make significant progress in securing Habitat Conservation Plans, which enable PG&E to efficiently conduct operations and maintenance activities while protecting listed endangered species. We also permanently protected 13,250 acres of land last year as part of our Land Conservation Commitment, which ultimately will protect approximately 140,000 acres of PG&E-owned watershed lands in perpetuity.
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We continued our multi-year, system-wide Climate Vulnerability Assessment to better understand how climate-driven natural hazards may impact our assets, services, and operations. And we advanced our decarbonization initiatives for the natural gas delivery system, including meeting the CPUC-mandated methane emission reduction target ahead of schedule and accelerating initiatives to meet our voluntary 2030 reduction goal.
We do this work transparently, reporting our progress in our annual Corporate Responsibility and Sustainability Report, (which starting in 2020 nowwhich incorporates reporting using the Sustainability Accounting Standards Board voluntary reporting framework),framework, and in our responses to the CDP (formerly the Carbon Disclosure Project) and related organizations. We are conducting a multi-year, system-wide climate vulnerability assessment to better understand how climate-driven natural hazards will impact our assets, services, and operations. We also plan to issueissued a Climate Strategy Report in 2022 (available at pge.com/climate), which will alignaligned with the guidance from the Task Force on Climate-Related Financial Disclosures (TCFD).California’s Prosperity
Disclosures.
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| Delivering for our Hometowns At PG&E, we recognize our responsibility to understand and respect the needs of our neighbors, including low-income communities, Black, Indigenous people, and other communities of color. Our efforts are guided by our Environmental and Social Justice (ESJ) Policy, updated in 2022 and available on our website at pge.com/includes/docs/pdfs/about/environment/pge_ej_policy.pdf. As part of our long-standing commitment, PG&E has maintained a dedicated ESJ Manager to coordinate our efforts from an operational and policy perspective, including engaging with external stakeholders and assisting with internal capacity building as part of a broader PG&E-wide effort to better address the needs of disadvantaged and vulnerable communities. | |
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Examples of our ESJ Policy in action include:
•Training more than 400 coworkers—including PG&E’s officer team—to build the competencies to reduce our impact and improve our collaboration with ESJ communities.
•Convening an internal ESJ working group to build an action plan and strengthen our management-level oversight of ESJ initiatives.
•Maintaining our focus on providing affordable energy service and offering financial assistance programs to help customers who are facing financial challenges.
•Continuing our long history of support for supplier diversity and the growth and development of small and diverse businesses.
Our commitment also includes working to strengthen relationships and partnerships with Native American tribal governments and communities. We maintain a tribal liaison and deputy tribal liaison to lead PG&E’s engagement, including activities related to PSPS events, wildfire safety, and the development of sustainable, resilient communities.
Our ESJ Policy aligns with our Human Rights Policy, adopted in 2021, which states that we will conduct our business in a manner that respects the human rights of all.
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| 2023 Joint Proxy Statement | 8 |
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| “As a lifetime advocate for environmental and social justice, I commend PG&E’s continued efforts to integrate ESJ in all its work for the company, its customers, and hometowns. At PG&E, ESJ means making better business decisions by understanding the impacts of our activities and investments on environmental and social justice communities, while providing more sustainable, inclusive, and equitable customer solutions. PG&E has a strong commitment to uplifting ESJ in all of its work.”
—Benjamin F. Wilson, Independent Board Member, PG&E Corporation and Pacific Gas and Electric Company | |
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We believe clean energy alternatives need to be affordable for and inclusive of all economic
backgrounds.We are supporting our customersbackgrounds, and co-workers through the COVID-19 pandemic
We are helping our customers throughout this crisis by providing financial assistance programs, and tools and tips to save energy. To protect our co-workers’ health and safety, we are providing essential safety gear and continually updating guidance on how to perform critical work safely while keeping virus transmission at bay. We are working with our local communities to assist with vaccination efforts, and to vaccinate our employees.
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We are addressing energy affordability and accessibility alongequity in collaboration with the California Public Utilities Commission (CPUC).CPUC and community partners. During 2022, we saw the following highlights:
| • | In 2020, PG&E helped almost 200,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| Home Energy Reports expanded to 3.05 million customers. We are a utility leader in the US for number of customers served and total bill savings generated for customers from this program. | | | | Helped customers avoid more than 675,000 metric tons of carbon dioxide emissions through our energy efficiency programs. | | | | Energy efficiency financing program funded 552 loans for a record $43.1 million lent. | | | | Energy Savings Assistance program worked with over 67,551 households with an average bills savings of $794.12. | |
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| Helped 223,000 customers enroll in the California Alternate Rates for Energy (CARE) program, providing income-qualified customers with a monthly discount on their Utility bill. Atbill, for a total of 1.47 millionPG&E customers enrolled in the endprogram. These customers received discounts totaling approximately $985.4 million. | | | | Launched an integrated marketplace website, called the Energy Action Guide, which guides residential customers to find the programs, resources, and customer energy products that suit their needs. The website saw over 237,000 unique visitors, up 99 percent from the previous year and over 1.2 million page views, up 147 percent from the previous year. | | | | Spent $4.79 billion or 39.3 percent of January 2021,total procurement with more than 1.58 million600 diverse suppliers which marked the fourth consecutive year of $3 billion-plus spend. PG&E’s diverse spend supported nearly 44,000 jobs, $2.5 billion in wages and $2.3 billion in taxes. Our Supplier Diversity program includes technical assistance like sustainability training to help businesses measure and reduce greenhouse gas emissions. | | | | Awarded a $250,000 grant to local FireSafe Councils to reduce the increased threat of wildfires due to tree mortality in northern and central California. | |
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| | COMMUNITY SUPPORT We support our hometowns through charitable giving programs and coworker donations and matching gift donations. Our coworkers also volunteered more than 29,000 hours in their communities while supporting 72 PG&E-sponsored volunteer events throughout our service territory. |
The PG&E customers were enrolled in CARE, compared to the 1.39 million enrolled at the end of February 2020 prior to the shelter-at-home mandates in response to the COVID-19 pandemic.Corporation Foundation | |
| • | PG&E’s Energy Savings Assistance program provides income-qualified households with no-cost improvements to make their homes more energy efficient, safe, and comfortable. |
More than $8.7 million in total contributions from PG&E coworkers, retirees, and matching gifts from The PG&E Corporation Foundation to 5,000 non-profit organizations and schools. | • | The federally funded Low-Income Home Energy Assistance Program provides financial assistance to help offset eligible household energy costs, including heating, cooling, and home weatherization expenses. |
WE SUPPORT COMMUNITY PROSPERITY
Over one-third (37.9 percent) of our 2020 spend went to businesses owned by women, minorities, service-disabled veterans, and LGBTQ individuals.
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• Convenient ways to better manage energy costs are available to all customers through online account tools that monitor energy use and check or compare rate plans, as well as help avoid or manage unanticipated high bills.
• We help our communities prosper: For the first time in the 40-year history of PG&E’s supplier diversity program, our spending with diverse suppliers reached $4.1 billion, representing 37.9 percent of our total spend, and exceeding goals set by the CPUC.
• We support the communities we serve through employee community volunteer and charitable giving programs as well as through our own donations and matching donations.
• In 2020, although we suspended company-wide volunteer activities due to the global pandemic, a quick shift to virtual volunteerism enabled 700 employees to volunteer in support of 16 community-based organizations throughout our service territory with home-based virtual volunteer events, sending nearly 3,500 care packages to community members in need.
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2021PG&E and Foundation | |
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$25 million in charitable giving from PG&E and The PG&E Corporation Foundation to non-profit organizations and schools. | |
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| 2023 Joint Proxy Statement | 510 |
Our triple bottom line of People, Planet, and Prosperity is underpinned by our unwavering focus on safety and improving our operational and financial performance. We have set specific goals to reduce wildfire risk, invest in our hometowns, and drive earnings growth.
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| Wildfire Safety In 2022, we met or exceeded 52 of 54 Wildfire Mitigation Plan (WMP) targets as we continued to focus on improvements in system hardening, vegetation management, system inspections and monitoring, and modeling capabilities; however, our work is not done until catastrophic wildfires stop. | |
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Sectionalized devices installed: 1,351 since 2019 | | | Enhanced vegetation management: 8,283 line miles completed since 2019 | | | System hardening: 1,224 line miles hardened since 2019 |
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Weather stations: 1,424 stations installed since 2019 | | | High-definition cameras: 602 cameras installed since 2019 | | | Over 398,000 poles inspected in High Fire Threat Districts and High Fire Risk Areas in 2022 |
Our Performance
• We have committed to making a “game-changing” investment in undergrounding power lines as a long-term solution to preventing wildfires. Since 2021, we have undergrounded more than 250 miles. We are decentralizing regionallyplanning to placecomplete another 350 miles in 2023, and with greater efficiencies and forecasted reduction in costs, we are aiming at a four-year target of undergrounding 2,100 miles between 2023 and 2026 (assuming authorization of all funding applicable for undergrounding requested in the 2023 General Rate Case). Our work will focus on areas where undergrounding can have the greatest effect on reducing wildfire risk and PSPS for customers.
• The EPSS program allows for automatic shutdown of electric lines within 1/10 of a second if the electric system senses a problem. In 2022, EPSS capability was expanded to all High Fire Risk Areas (HFRA) as well as select adjacent areas. Through December 31, 2022, there was a greater than 36 percent reduction in CPUC reportable ignitions in High Fire Threat Districts (HFTD) areas compared to the 2018-2020 three-year average. This is primarily driven by a more co-workersthan 65 percent reduction in CPUC reportable ignitions on EPSS-enabled lines in HFTD areas (compared to weather-normalized 2018-2020 average ignitions). Along with the significant reduction of overall ignition count, we have also observed a decrease in total HFTD acres burned. In 2022, we observed a 99 percent decrease in total HFTD acres burned relative to the 2018-2020 average. A primary driver for this is understood to be the reduced fault energy, which is the amount of energy delivered to a fault location, that occurs when EPSS protection is enabled. We also saw a 68 percent reduction in reportable ignitions on primary distribution conductor when enabled, weather normalized, and operational leadership closera 99 percent reduction in acres impacted compared to our customers. We aim to:a 2018-2021 3-year average.
• The PSPS program proactively de-energizes power lines in response to forecasted weather conditions.In 2022, no customers were de-energized as part of the PSPS program.
| • | Address local issues faster; | | | |
| 2023 Joint Proxy Statement | •11 |
| Reduce outage response times; | | | | | | | | | | | | | |
| • | Create faster interconnections for our customers connecting solar or distributed energy to the grid; and |
| • | Build stronger relationshipsClimate Resilience The impacts of climate change on our infrastructure are already a reality. Peak electric loads are expected to increase with rising temperatures due to direct impacts of ambient temperatures on equipment and information flow between usdirect impacts on electricity demand driven by rising air conditioning installation and usage. Climate change will continue to intensify the potential for wildfires throughout California. Additionally, our customers. |
We worked to make our Public Safety Power Shutoff (PSPS) program more targeted and focused in 2020. We used technology to achieve:
| • | More than twice as precise modelling capabilitiesassets on the coast and in or near watersheds face potential increased exposures to coastal, riverine, and precipitation-related flooding because of climate-driven changes in precipitation and sea-level rise.A key element of preparing for the 2020 season;physical risks of climate change is an updated system-wide Climate Vulnerability Assessment of our assets, operations, and services, which we expect to file with the CPUC in 2024. The assessment is expected to improve our understanding of exposure to climate hazards and the sensitivity of assets and operations to these hazards. Importantly, PG&E will engage with disadvantaged and vulnerable communities throughout this process. | |
| • | Fifty-five percent fewer average impacted customers, exceeding our 33 percent goal; and |
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| • | Restoration of 96 percent of impacted customers within 12 daylight hours. |
We intend even greater improvements in 2021:
| • | Further utilization of PSPS mitigations including sectionalizing devices for both distribution and transmission, temporary generation applications, and implementation of pilot technologies. |
| •Financial Performance PG&E is focused on mitigating physical and financial risk. Its layers of protection—including wildfire mitigation programs (e.g., system hardening and undergrounding), EPSS, PSPS, and situational awareness—are combining to make PG&E’s system safer and more resilient in the face of evolving climate challenges. If we have excess resources in a particular year, rather than the profits flowing to shareholders, we intend to redeploy back into our system for the benefit of customers in order to deliver a consistent growth trajectory. | Enhanced customer support for our most vulnerable and frequently impacted customers, including batteries to support medical devices, meal replacements, and improved in-event PSPS communications though our partnerships with community-based organizations. |
The majority of our executives’ variable (non-salary) pay is tied directly to customer and safety metrics:
| • | Seventy-five percent of annual variable incentive pay granted in 2020 was tied to public and employee safety performance. |
| • | Fifty percent of our long-term incentive executive pay granted in 2020 was tied to public safety and reliability performance, and the other 50 percent tied to customer experience (half tied to a customer satisfaction score and half to PSPS notification accuracy). |
We continue to make progress on the core elements of our Wildfire Mitigation Plan, including:
| • | System hardening; |
| • | Vegetation management; |
| • | Enhanced inspections; |
| • | Improved situation monitoring and modeling; and |
| • | Improved risk assessments in project planning and execution. |
• | We have improved financial clarity due to progress in key regulatory cases. |
• | We are projecting 10 percent non-GAAP core earnings per share1 compound average growth from 2021 through 2025. |
• | We are projecting approximately 8.5 percent rate base growth, largely driven by wildfire mitigation capital investments. |
Cautionary Statement Concerning Forward-Looking Statements
This Joint Proxy Statement contains forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans, and strategies of PG&E Corporation and the Utility, as well as forecasts and estimates regarding PG&E Corporation’s non-GAAP core earnings per share, rate base growth, PSPS program, Wildfire Mitigation PlanWMP, climate and clean energy goals and commitments, and other financial and operating expectations, estimates, plans, and strategies. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in PG&E Corporation’s and the Utility’s annual report on Form 10-K for the year ended December 31, 20202022 and other reports filed with the SEC,Securities and Exchange Commission (SEC), which are available on PG&E Corporation’s website at www.pgecorp.compgecorp.com and on the SECSEC's website at www.sec.gov.sec.gov. Some of the factors that could cause future climate and clean energy results to differ materially from those expressed or implied by the forward-looking statements, or from historical results, include, but are not limited to: whether we are able to dedicate adequate resources to implement our climate strategy; uncertainty regarding maturing technologies; uncertainly whether the necessary infrastructure updates will be made to enable a diverse supply of cleaner fuels; the degree to which customers adopt technologies and behaviors that reduce greenhouse gas emissions; regulatory and financing innovations needed to reduce unnecessary new costs for the energy system, and recovering necessary costs in a sustainable, equitable, and affordable manner; the degree to which we attract, retain, and develop a workforce with the required skill profiles to meet our climate strategy; and the impact of changes to federal, state, and local climate policies. Additionally some of the factors that could cause our undergrounding results to differ materially from those expressed or implied by the forward-looking statements, or from historical results, include, but are not limited to: the timing and outcome of CPUC proceedings, including ratemaking and cost recovery. Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements. PG&E Corporation and the Utility undertake no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.
1 | “Non-GAAP core earnings” and “Non-GAAP core earnings per share” are non-GAAP financial measures. See Exhibit A at the end of the CD&A for a reconciliation of results based on non-GAAP core earnings to results based on income available for common shareholders in accordance with GAAP | | | | |
20212023 Joint Proxy Statement | 612 |
Our Board
ITEM NO.Proposal 1: ELECTION OF DIRECTORS OF PG&E CORPORATION AND PACIFIC GAS AND ELECTRIC COMPANY
We ask for your support to elect 6 directors to serve on the BoardElection of Directors of PG&E Corporation and 7 directorsPacific Gas and Electric Company
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| Board Recommendation | | What are you voting on? PG&E Corporation and the Utility each asks its respective shareholders to approve the 2023 director nominations. PG&E Corporation and Utility Class A directors are elected to hold office until the 2024 Joint Annual Meeting, or until their successors are elected and qualified, except in the case of death, resignation or removal of a director. If any of the nominees is unable at the time of the Joint Annual Meeting to accept nomination or serve as a director, the proxy holders named on the PG&E Corporation or Utility Proxy Card (as applicable) will vote for substitute nominees at their discretion. |
| Vote "FOR" Each Nominee | |
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Board
of the Utility.Overview
To create stability as we emerged from Chapter 11 in 2020,
and as part of our Plan of Reorganization, we agreed with the CPUC that our Boards would be divided into two classes
starting with director elections in 2020, with each class elected for
a two-year
terms.term. These terms
will beare being phased
out over the next three years so that, out—in
2023, Class A directors are elected for a one-year term, and by 2024, all directors will
be elected for one-year terms and stand for election annually.
All nominees for director of
thePG&E Corporation
(the Corporation) in
20212022 also are nominees for director of the Utility.
In addition, Adam L. Wright, the Executive Vice President, Operations and Chief Operating Officer of the Utility,Mr. Singh is a nominee for the
Utility Board only. All nominees were nominated by the Board of the
Utility. Each nominee is an incumbent director and each was elected to the Boards in July 2020 in connection with the companies’ emergence from Chapter 11, except for Mr. Wright, who joined the Utility Board in February 2021.respective company.Nominees
Name | Age | Independent | | | | | | |
| Name | Age | Independent |
| Cheryl F. Campbell | 6163 |  |
| Kerry W. Cooper | 4951 |  |
| Arno L. Harris | 5153 | |
| Carlos M. Hernandez | 68 | ü |
| Michael R. Niggli | 7173 | |
Oluwadara J. TresederSumeet Singh | 3244 | |
| Benjamin F. Wilson | 6271 | |
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UTILITY BOARD ONLY | | |
Adam L. Wright | 43 | |
If elected as directors, all of the 2021 nominees have agreed to serve and will hold office until the 2023 annual meetings or until their successors are elected and qualified, except in the case of death, resignation, or removal of a director. Each nominee has consented to being named in this Joint Proxy Statement and intends to serve if elected.
If any of the nominees is unable at the time of the 2021 Annual Meetings to accept nomination or serve as a director, the proxy holders named on the PG&E Corporation or Utility Proxy Card (as applicable) will vote for substitute nominees at their discretion.
As you will read in the biographical information that follows, the current Boards, including the incumbent nominees, bring significant experience in utility management, safety, technology, finance, emergency management, communications, remediation projects, and public policy, and familiarity with the needs of the state of California.
The Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company Unanimously Recommend Voting FOR Each of the Nominees for Director Presented in This Joint Proxy Statement.
2021 Joint Proxy Statement | 7 |
Director Biographies
DIRECTOR BIOGRAPHIES
Class “A” Directors (Standing for Election in
2021)2023) | | | | | | | | | | | | | | | | | |
Cheryl F. Campbell Age: 61
| | Director Since: April 2019Since | Age | | Current Board Committees: ComplianceCommittees |
| April 2019 | 63 | | •Executive (Chair, Pacific Gas and Public Policy, Executive, Nominating and Governance, Electric Company) •Safety and Nuclear Oversight Committee (Chair)Current Position: Consultant, Former
•Sustainability and Governance |
| Recent Position Retired Senior Vice President of Gas, Xcel Energy, Inc. Prior Positions:
Ms. Campbell served as the
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Skills Matrix
Natural Gas Transmission, Distribution, and Safety
Risk Management
Workforce and/or Public Safety | | Background •Energy Industry Consultant (2019 to 2021) •Senior Vice President, Gas at(2015 to 2018); Vice President (2011 to 2015); Director, Gas Asset Strategy (2004 to 2008), Xcel Energy, Inc. (Electric and President and CEO of West Gas Interstate, In. a FERC-regulated pipeline owned by Xcel Energy, from 2011 to 2018. Prior to Xcel Energy Inc., Ms. Campbell worked at Coastal Corporation (1984 to 2001) where she held various roles, including director.Other Board Experience:
Ms. Campbell currently serves as a board member of Summit Utilities, Inc. (energy) (2020 to present), and National Underground Group (construction) (2018 to present). Advisory director for JANA Corporation (software development/IT) (2020 to present).
natural gas utility) Experience, Skills, and Expertise:Expertise Ms. Campbell has extensivedeep experience in risk management and oversight, as well as employee and public safety, and improving customer, regulatory, and financial outcomes.safety. She has worked on safety regulations at the national level, withserving on the Department of Transportation on safety regulations, as well asTransportation’s Gas Pipeline Advisory Committee, and with organizations involved in environmental sustainability. Ms. Campbell served aswas a member of the independent panel assessing the enterprise risk management and overall safety of the 11 gas utilities in Massachusetts in the aftermath of the September 2018 explosions and fires in Merrimack Valley. She is also committed Public Company Board Service •TC Energy Corporation (2022 to public service, with leadership roles in non-profit organizations, including Boardbound by present) Other Board Service •National Association of Corporate Directors, Colorado Chapter (2022 to present) •Women’s Leadership Foundation which focuses on educating and increasing(2020 to present) (Chair of the number of women on boards. |
2021 Joint Proxy Statement | 8 |
Board)| •JANA Corporation (2020 to present) •Summit Utilities, Inc. (2020 to present) •National Underground Group (2018 to present) Past Board Service •Gold Shovel Association (2020 to 2022) |
 | | | | Director Since: July 2020Since | Age | | Current Board Committees: Committees |
| July 2020 | 51 | | •Finance Audit, Compliance and Public PolicyMost Innovation
•People and Compensation |
| Recent Position: President and Chief Operations Officer, Rothy's, Inc.Prior Positions:
Ms. Cooper served as thePosition
Former President and Chief Operating Officer, at Rothy's, a consumer goods company, from November 2017Rothy’s Inc. |
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Skills Matrix
Large Scale Customer Experience
Financial Performance and Planning
Technology and Cybersecurity | | Background •President and Chief Operating Officer, Rothy’s Inc. (Consumer goods) (2017 to January 2020, where she built the brand and growth marketing teams as well as the operations, merchandising, and planning functions. Prior to that, she served as CEO of2020) •Chief Executive Officer, Choose Energy (nationalInc. (National energy marketplace) (2013 to 2016), •Chief Operating Officer, and Chief Marketing Officer, of Modcloth (consumer(Consumer goods) (2010 to 2013), and held various leadership positions at Walmart (2008 to 2010).Other Board Experience:
Ms. Cooper currently serves as a board member of Fernish (furniture rental) (2020 to present), Treau (HVAC start-up) (2020 to present), and The Production Board (capital holding company) (March 2020 to present). She formerly served on the boards of BevMo! (2017 to 2020), Weddington Way (2015 to 2017), and Choose Energy (2013 to 2016).
Experience, Skills, and Expertise:Expertise Ms. Cooper brings extensive experience in implementing large-scale customer programs, as well as building businesses and teams, which areis critical as the Boards oversee PG&E’s efforts to decentralizeregionalize and bring operations closer to the customer. During her time at Choose Energy, she built the brand and oversaw its expansion to operating in all deregulated states and added natural gas and solar, and shifted the marketing mix from largely paid online acquisition to diverse channels.resulting in a sustainable business model. Ms. Cooper washas previously been responsible for owning and driving major technology projectsmanaging financial reporting at Walmart.com, driving omnichannel integration, building new products (e.g., marketplace), and building big data connections between store and online. Ms. Cooperseveral companies. She also provides the perspective of a PG&E customer and California resident. Ms. Cooper has been responsible for building consumer brands, especially in the energy sector, and connecting Public Company Board Service •Upstart Holdings Inc. (2021 to consumers’ needs.present) •TPB Acquisition Corporation I (2021 to February 2023) Other Board Service •Mozilla (March 2023 to present) •Fictiv (February 2023 to present) •Gradient (2020 to present) •Fernish (2020 to present) |
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| | Director Since: July 2020Since | Age | | Current Board Committees: ComplianceCommittees |
| July 2020 | 53 | | •Audit •Sustainability and Public Policy, Finance, Technology and CybersecurityGovernance |
| Current Position: Position Managing Partner, AHC Prior Positions:
Mr. Harris served as the CEO of
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| | |
Skills Matrix
Innovation and Technology in Clean Energy
Climate Change and Climate Resilience
Renewable Energy and Related Engineering Experience | | Background •Managing Partner, AHC (Clean energy and transportation consulting) (2015 to present) •Chief Executive Officer, Alta Motors an electric(Electric motorcycle manufacturer, from October 2017manufacturer) (2017 to October 2018. He previously founded2018) •Founder and served as the CEO ofChief Executive Officer, Recurrent Energy, (U.S. utility-scaleLLC (Utility-scale solar and energy storage project developer) (2006 to 2015) .Other Public Company Board Experience:
Mr. Harris has served on the boards of Azure Power Global Limited (solar IPP and developer in India) since 2016, and ArcLight Clean Transition Corp. (SPAC / energy transition) since 2020.
Other Board Experience:
Mr. Harris has also served on the boards of Alta Motors (2017 to 2018) and Advanced Energy Economy (trade association) (2012 to 2015), and chaired the Solar Energy Industries Association board (trade association) (2014 to 2015) and the Recurrent Energy board (2006 to 2015).
Experience, Skills, and Expertise:Expertise Mr. Harris brings 25 years of experience in clean technology and renewable energy with deep experience workingthrough his work on climate change issues through the intersection of technology, business, and public policy. Mr. Harris'His understanding of energy, sustainability, and commercial operations within California'sCalifornia’s regulatory environment contributes to the Boards'Boards’ effective oversight of ESGenvironmental, social, and governance (ESG) and climate change issues. Mr. Harris is also a longtime California resident and PG&E customer who has demonstrated a commitment to the community through his work supporting Tipping Point Community, a non-profit focused on alleviating poverty. Other Board Service •Gator Holdings, LLC (2022 to present) Past Public Company Board Service •ArcLight Clean Transition II (2021 to 2022) •Azure Power Global Limited (2016 to 2022) (Chair of Audit Committee; Chair of Capital Committee) •ArcLight Clean Transition Corp. (2020 to 2021) |
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2021 | | | | | | | | | | | | | | | | | |
Carlos M. Hernandez | | Director Since | Age | | Current Board Committees |
| March 2022 | 68 | | •Audit •Finance and Innovation |
| Recent Position Former Chief Executive Officer, Fluor Corporation |
| | |
Skills Matrix
Risk Management
Financial Performance and Planning
Workforce and/or Public Safety | | Background •Chief Executive Officer (2019 to 2020); Interim Chief Executive Officer (2019); Executive Vice President, Chief Legal Officer, and Secretary (2007 to 2019), Fluor Corporation (Engineering and construction) •General Counsel and Secretary, Arcelor Mittal Americas (Steel and mining) (2004 to 2007) Experience, Skills, and Expertise Mr. Hernandez brings decades of experience in legal affairs, risk management, financial restructuring, and corporate governance and compliance. He has a strong foundation in law, business, and engineering, having served as General Counsel of publicly-traded companies in engineering, procurement, construction (EPC), manufacturing, and distribution. During his time at Fluor Corporation, he developed, led, and executed project risk assessment, established new selectivity criteria, and restored confidence in the company’s financial reporting. He has experience with environmental and safety matters, as well as government affairs. Past Public Company Board Service •Fluor Corporation (2019 to 2020) Other Board Service •Steward Health Care System (2021 to present) •NuScale Power LLC (2011 to 2019) |
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| 2023 Joint Proxy Statement | 915 |
 | | | | Director Since: July 2020Since | Age | | Current Board Committees: Finance, Committees |
| July 2020 | 73 | | •People and Compensation •Safety and Nuclear Oversight Technology and CybersecurityMost
|
| Recent Position: Position Retired President and Chief OperationsOperating Officer, San Diego Gas & Electric Company Prior Positions:
Mr. Niggli served as
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| | |
Skills Matrix
Wildfire Safety, Prevention and Mitigation
Natural Gas Transmission, Distribution, and Safety
Nuclear Generation Safety | | Background •President and Chief Operating Officer of(2010 to 2013); Chief Operating Officer (2007 to 2010), San Diego Gas & Electric Company (SDG&E), a regulated utility company owned by Sempra Energy, from 2010 through December 2013. He held other leadership positions at Sempra Energy, including as •Chief Operating Officer, of SDG&E (2008 to 2010), Chief Operating Officer of both SDG&E & Southern California Gas Company (2006 to 2007), and President of Sempra Generation (2000 to 2006). Prior to his time at Sempra Energy, he served as the Chairman of the Board, CEO, and President of Sierra Pacific Resources (1999 to 2000), and Chairman of the Board, CEO, and President of Nevada Power Company (1998 to 1999).Other Board Experience:
Mr. Niggli currently serves on the boards of American Transmission Company (2015 to present), ESVAL (subsidiary of AndesCan SpA in Chile) (2015 to present), ESSBIO (subsidiary of AndesCan SpA in Chile) (2015 to present), and as Chairman of the Board of ESS, Inc. (energy storage) (Board member from 2015 to present).
Experience, Skills, and Expertise:Expertise With overmore than four decades of experience in the utility and energy sector, Mr. Niggli brings significant operations, risk management, and leadership experience, particularly in regulated utilities in California.utilities. Mr. Niggli provides in-depth knowledge of the California regulatory landscape, and while induring his leadership role at SDG&E established the first-of-their-kind wildfire and public safety programs aimed at reducing risks associated with wildfire. Mr. Niggliwildfire risks. He has been a longtime supporter of and leader for the Great Basin National Park Foundation, working to preserve and make accessible the natural beautyresources of the park. |
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 | | Oluwadara (Dara) J. Treseder
Age: 32
Director Since: July 2020
Current Board Committees: Compensation, Finance
Current Position: Senior Vice President, Head of Global Marketing & Communications, Peloton Interactive, Inc.
Prior Positions:
Ms. Treseder was the Chief Marketing and Communications Officer at Carbon Inc., a 3D printing technology company, from December 2018 to August 2020, where she led marketing, communications, and inside sales. Prior to that, she was the Chief Marketing Officer at GE Business Innovations and GE Ventures (2017 to 2018) and Marketing Manager and Global Head of Demand Generation, File Maker, at Apple, Inc. (2015 to 2017).
Other Board Experience:
Ms. Treseder Mr. Niggli also currently serves on the boardDean’s Advisory Council for California State University, Long Beach.
Public Company Board Service •ESS, Inc. (2015 to present) (Chair of the Public Health Institute (non-profit public health organization) (2017Board) •Avanea Energy Co. (2021 to present). Other Board Service •American Transmission Company (2015 to present) •ESVAL (2015 to present) •ESSBIO (2015 to present) |
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Sumeet Singh | | Director Since | Age | | Non-Independent Director, Pacific Gas and Electric Company Board |
| March 2023 | 44 | |
| Current Position Executive Vice President, Operations and Chief Operating Officer, Pacific Gas and Electric Company |
| | |
Skills Matrix
Utility Operations or Related Engineering Experience
Natural gas transmission, distribution, operation, and safety
Wildfire Safety, Preparedness, Prevention, Mitigation, Response, and Recovery | | Background •Executive Vice President, Operations and Chief Operating Officer, Pacific Gas and Electric Company (Utility) (2023 to present) •Executive Vice President, Chief Risk and Chief Safety Officer, PG&E Corporation and the Utility (2022 to 2023) •Senior Vice President and Chief Risk Officer, PG&E Corporation and the Utility (2021) •Interim President and Chief Risk Officer of the Utility and Senior Vice President and Chief Risk Officer, PG&E Corporation (2021) •Senior Vice President, Chief Risk Officer (2020 to 2021) •Gas Integrity & Safety Officer, Picarro Inc. (Gas analyzer manufacturer) (2020); •Vice President, Asset Management and Community Wildfire Safety Program, Utility (2018 to 2020); •Vice President, Gas Operations, Utility (2014 to 2018) Experience, Skills, and Expertise:Ms. TresederExpertise
Mr. Singh provides the Utility Board with knowledge of the Utility’s operations, experienced utility leadership, and engineering background. He also brings experience in large-scale customersafety, risk, electric and gas operations, consumer insights, and communication toasset management developed during his career with PG&E. As the PG&E Boards. Ms. Treseder has a background leading communications in highly regulated industriesUtility’s Executive Vice President, Operations and driving customer engagement, a strong understanding of finance and, financial planning, and knowledge of management incentives and compensation. Ms. Treseder has been a champion for underserved and marginalizedChief Operating Officer, Mr. Singh focuses on safety, increasing connectivity among operational groups, and remains committedpromoting operational excellence. Other Board Service •GTI Energy (2021 to building strong communities that work for everyone.present) |
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2021 | | | | | |
| 2023 Joint Proxy Statement | 1016 |
 | | Benjamin F. Wilson Age: 62
| | Director Since: July 2020Since | Age | | Current Board Committees: Committees |
| July 2020 | 71 | | •Audit (Chair), Executive, Nominating •Sustainability and GovernanceCurrent Position:
•Executive |
| Recent Position Retired Chairman, Beveridge & Diamond PC Prior Positions:
Mr. Wilson has spent 35 years at
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Skills Matrix
Risk Management
Climate Change and Climate Resilience
Management Incentives | | Background •Chairman (2017 to 2021); Managing Principal (2008 to 2016), Beveridge & Diamond PC an environmental(Environmental law practice group.Other Board Experience:
Mr. Wilson currently serves as a board member of Northwestern Mutual Life Insurance Company (2013practice)
•Adjunct Professor, Howard University (2004 to present), Beveridge & Diamond, P.C. (2015 to present), and Environmental Law Institute (2011 to present). He has also served on the board of Dartmouth College (2012 to 2020). Experience, Skills, and Expertise:Expertise Mr. Wilson brings a depth of experience, having been lead counsel in numerous complex environmental and regulatory matters for major consumer product corporations, retailers, oil and gas companies, municipalities, and developers. His service as Monitor for the Duke Energy coal ash spill remediation project and as Deputy Monitor in the Volkswagen emissions proceedings provides an important perspective to the Board. Mr. Wilson also offers deep experience with environmental justice issues and is a recognized leader on diversity and inclusion issues in the legal profession. Mr. Wilson served on the Audit Committee of the board of directors of Other Board Service •Northwestern Mutual Life Insurance Company and chaired the(2010 to present) (Lead Director, Audit Committee for the Boardmember) •Environmental Law Institute (2017 to present) •Dartmouth College (2012 to 2020) (Chair of Trustees of Dartmouth College.Audit Committee) |
| | |
 | | Adam L. Wright
Age: 43
Director Since: February 2021
Current Position: Executive Vice President, Operations and Chief Operating Officer, Pacific Gas and Electric Company
Prior Positions:
Mr. Wright served as President and CEO of MidAmerican Energy Company (MEC), a Berkshire Hathaway Energy company, from January 2018 to January 2021. In his 18-year tenure with the Berkshire Hathaway Energy family of businesses, he served in various leadership positions, including as MEC’s Vice President of Gas Delivery (2015 to 2017) and Vice President of Wind Generation and Development (2012 to 2015).
Other Board Experience:
Mr. Wright has served on the boards of MEC (2018 to 2021), the Iowa Business Council (2018 to 2021) and Iowa Utility Association (2018 to 2021). He was also an advisory director for the American Gas Association.
Experience, Skills, and Expertise:
Mr. Wright provides the Utility Board with knowledge of the Utility’s operations, experienced utility leadership, and engineering background. He also brings experience in safety, compliance, operations, customer service, natural gas, renewable generation, and transmission and distribution developed during his career with MEC and other Berkshire Hathaway Energy companies. As PG&E’s Executive Vice President of Operations and Chief Operating Officer, Mr. Wright focuses on safety, increasing connectivity among operational groups, and promoting excellence.
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2021 Joint Proxy Statement | 11 |
Class “B” Directors (Not Standing for Election in 2021)2023) | | | | | | | | | | | | | | | | | |
| | | | | |
| | Director Since: July 2020Since | Age | | Current Board Committees: Committees |
| July 2020 | 59 | | •Audit •Finance and Innovation |
| Current Position Chief Financial Officer, Icertis |
| | |
Skills Matrix
Financial Performance and Planning
Technology and Cybersecurity Current Position:
Large Scale Customer Experience | | Background •Chief Financial Officer, Icertis (Contractor management software company) (2022 to present) •Chief Financial Officer, ID.me, Inc. (Digital identity network) (2021 to 2022) •Chief Financial Officer, Wish Inc.Prior Positions:
Mr. Bahri served as (Digital marketplace) (2016 to 2021)
•Chief Financial Officer, at Jasper Technologies Inc., a leading Internet (Internet of Things service platform, from July 2013 until June 2016, where he scaled the company, prepared the company for an initial public offering, and successfully sold the companyplatform) (2013 to Cisco Systems, Inc. He previously served as 2016) •Chief Financial Officer, for Trimble Navigation Limited (Information technology) (2005 to 2013), Kraft Canada, Inc. (2001 to 2004), and Kraft Pizza Company (2000 to 2001).Other Public Company Board Experience:
Mr. Bahri previously served on the board of Stec, Inc. (computer storage) (2008 to 2011), where he was Chair of the Audit Committee.
Other Board Experience: N/A
Experience, Skills, and Expertise:Expertise Mr. Bahri is a seasoned CFOChief Financial Officer with public company and leadership experience and extensive knowledge of finance, financial performance and planning and audit. At Wish, Mr. Bahri supported the company’s global expansion to over 80 countries and prepared its infrastructure and resources for the initial public offering in 2020. He is skilled at building enterprise-wide systems and teams, and brings decades of experience in executive compensation, enterprise risk management, and corporate governance, as well as the operation of audit committees. As a California resident, Mr. Bahri also provides the perspective of a utility customer to the Boards.Board. Past Public Company Board Service •STEC, Inc. (2008 to 2011) (Chair of the Audit Committee) |
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 | 17 |
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Edward G. Cannizzaro | | Director Since | Age | | Current Board Committees |
| February 2023 | 62 | | •Finance and Innovation •Audit
|
| Recent Position Former Global Head of Quality, Risk and Regulatory, KPMG International |
| | |
Skills Matrix
Financial Literacy
Risk Management
Audit | | Background •Global Head of Quality, Risk and Regulatory, KPMG International Limited (2018 to 2022) •National Managing Partner - Risk Management, KPMG (2016 to 2018) •Lead Engagement Partner, KPMG (2009 to 2016) Experience, Skills, and Expertise Mr. Cannizzaro brings 40 years of experience as a global financial executive to the Boards of the Corporation and the Utility. He has a deep background in financial accounting and reporting, risk management, operations, and operational regulatory compliance. During his tenure at KPMG, he served as the Global Head of Quality, Risk and Regulatory, the West Area Managing Partner of Audit, and provided sound oversight and governance as a member of the Board of Directors of KPMG Americas and KPMG US. Mr. Cannizzaro also provides the perspective of a PG&E customer and California resident. Public Company Board Service •Ross Stores, Inc. (2022 to present) Other Board Service •KPMG LLP (2015 to 2018) |
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Jessica L. Denecour Age: 59
| | Director Since: July 2020Since | Age | | Current Board Committees: Compensation, Executive, NominatingCommittees |
| July 2020 | 61 | | •Sustainability and Governance Technology(Chair) •People and Cybersecurity (Chair)Most Compensation
•Safety and Nuclear Oversight •Executive
|
| Recent Position: Position Former Senior Vice President and Chief Information Officer, Varian Medical Systems, Inc. Prior Positions:
Ms. Denecour was the
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| | |
Skills Matrix
Technology and Cybersecurity
Workforce and/or Public Safety
Risk Management | | Background •Senior Vice President, and Chief Information Officer, of Varian Medical Systems Inc., a leading(Medical device manufacturer of medical devices and software for cancer treatments, from January 2006treatments) (2006 to September 2017. Prior to that, she held numerous senior roles at2017) •Vice President, Global IT Application and Solution Services and Global Infrastructure and Operations, Agilent Technologies, Inc. (chemical(Chemical analysis, life sciences, and diagnostics) (1999(2000 to 2005) and The Hewlett- Packard Company (information technology and services) (1983 to 1999). Other Public Company Board Experience:
Ms. Denecour served on the board of MobileIron, Inc. (software security) (2017 to 2020).
Other Board Experience: N/A
Experience, Skills, and Expertise: Expertise Ms. Denecour has more than 30 years of experience as an information technologyleading global companies into the digital age. As a senior executive and cybersecurity executive, including overseeing investments in new and innovative technology. She hasChief Information Officer, she gained a deep understanding of threats and mitigations in cybersecurity risk management.management, and experience overseeing investments in new, innovative technology. During her career, she has led multiple IT transformations, built effective data privacy and security programs, and implemented state-of-the-art IT governance.governance and systems. A long-time California resident and utility customer, Ms. Denecour has also demonstrated a commitment to the community through her board work supporting non-profits aimed at achieving gender parity in the boardroom, as well as supportingand creativity and lifelong learning in children. Past Public Company Board Service •MobileIron Inc. (2017 to 2020) (Chair of the Cybersecurity Committee, Nominating and Governance Committee, and Member of the Audit Committee) Other Board Service •Athena Alliance (2016 to 2018) (founding member) •Children’s Discovery Museum of San Jose (2010 to 2017) |
2021 | | | | | |
| 2023 Joint Proxy Statement | 1218 |
 | | Admiral Mark E. Ferguson III, USN (ret.) Age: 64
| | Director Since: July 2020Since | Age | | Current Board Committees: Committees |
| July 2020 | 66 | | •People and Compensation (Chair), Executive, •Safety and Nuclear Oversight Technology •Executive
|
| Current Position Independent Defense and CybersecurityCurrent Position: Senior Aerospace Consultant
|
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Skills Matrix
Nuclear Generation Safety
Workforce and/or Public Safety
Management Incentives | | Background •Independent Aerospace and Defense Consultant, MK3 Global LLC (2016 to present) •Advisor, Defense Science Studies Group, Institute for Defense Analyses and(2019 to present) •Advisor, Allied Command Operations, NATOPrior Positions:
Admiral Ferguson retired from the U.S. Navy in 2016 after 38 years of service, having most recently served as (2018 to present)
•Senior Advisor, McKinsey & Company (2016 to 2020) •Commander of the U.S. Naval Forces in Europe and Africa and NATO Allied Joint Force Command, Naples, Italy (2014 to 2016). Prior to that, he served as; Vice Chief of Naval Operations (2011 to 2014) and Chief of Naval Personnel (2008 to 2011). He served as a Senior Advisor with McKinsey & Company (2016 to 2020) and as an independent aerospace and defense consultant.Public Company Board Experience:
Mr. Ferguson serves on the board of VSE Corporation (logistics and supply chain) (2017 to present).
Other Board Experience:
Mr. Ferguson also serves on the board of trustees for the Center for Naval Analyses (federally-funded R&D center) (2017 to present).
, U.S. Navy Experience, Skills, and Expertise: Expertise Admiral Ferguson brings decades of experience in nuclear reactor operations, nuclear propulsion engineering, risk and change management, and cyber preparedness. Duringpreparedness from his tenure38-year career in the U.S. Navy. Through his leadership positions in the U.S. Navy, he directed the transformation of its personnel management system and education programs; hisprograms. His organization received the Workforce Magazine Optimas Award for innovative personnel policies supporting diversity and women in the workplace. HeAdmiral Ferguson presently is a member of several veteran service organizations.organizations and holds a NACD certification in cyber risk oversight. Public Company Board Service •VSE Corporation (2017 to present) Other Board Service •Center for Naval Analyses (2017 to 2021) (Chair of the Audit Committee) |
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 | | | | Director Since: July 2020, Independent non-executive Chair of the Corporation Board since July 2020.Since | Age | | Current Board Committees: Audit, Compensation, Committees |
| July 2020 | 64 | | •Executive (Chair, Corporation committee), NominatingCommittee) •Audit •Finance and Governance (Chair)Most Innovation
|
| Recent Position: Position Former President and Chief Executive Officer, Dynegy Prior Positions:
Mr. Flexon served as Inc.
|
| | |
Skills Matrix
Risk Management
Financial Performance and Planning
Management Incentives
| | Background •President and CEO ofChief Executive Officer, Dynegy Inc., a (Independent power producer) (2011 to 2018) •Chief Financial Officer, UGI Corporation (Electric and energy supplier and marketer serving the Northeast, Midwest, Texas, and California from June 2011 to May 2018, where he was a key architect in creating the largest independent power producer in the U.S. through the strategic combination with Vistra Corp. Prior to his tenure at Dynegy, he was President and CEO ofnatural gas utility) (2011) •Chief Executive Officer, Foster Wheeler AG (Engineering and Construction) (2009 to 2010), and held a variety of leadership positions at NRG Energy, Inc. (integrated independent power generator and marketer (2004 to 2009).Public Company Board Experience:
Mr. Flexon currently serves on the boards of Capstone Turbine Corporation (micro turbine manufacturer) (2017 to present) and Charah Solutions, Inc. (coal ash management, remediation and marketing) (2018 to present). Mr. Flexon previously served on the board of Dynegy (2011 to 2018), TransAlta Corporation (power generator and energy marketer) (2018 to 2020), and Westmoreland Coal Company (coal mining) (2016 to 2019).
Other Board Experience:
Mr. Flexon has served on the board of Genesys Works Houston since 2016, providing career education and professional experience to high school students in the underserved communities of Houston, Texas.
Experience, Skills, and Expertise: Expertise Mr. Flexon, our Corporation’s Independent Board Chair, provides executive leadership experience in the competitive power and oil and gas sectors. During his time at Dynegy, he executed cultural, operational, and financial restructuring that tripled the company’s size and achieved top decile safety performance, andas well as enhanced employee engagement. Mr. Flexon brings extensive safety, risk management and labor relations experience, as well as experience with turnarounds, having led both Dynegy’s 2011 bankruptcy and its culture transformationNRG Energy Inc.’s [2003] post-bankruptcy exit. Public Company Board Service •Capstone Green Energy Corporation (2018 to present) (Chair of the Board, Member of Audit Committee, and growth post-emergence.Member of Compensation Committee) •Charah Solutions, Inc. (2018 to present) (Chair of Audit Committee) •TransAlta Corporation (2018 to 2020) •Westmoreland Coal Company (2016 to 2019) •Dynegy Inc. (2011 to 2018) Other Board Service •ERCOT (Texas Independent System Operator) (2021 to present) |
2021 | | | | | |
| 2023 Joint Proxy Statement | 1319 |
 | | | | Director Since: July 2020Since | Age | | Current Board Committees: Compliance and Public Policy, Committees |
| July 2020 | 64 | | •Safety and Nuclear Oversight
•Sustainability and Governance
|
| Current Position: Position Owner, Craig Fugate Consulting |
| | |
Skills Matrix
Wildfire Safety, Prevention and Mitigation
Climate Change and Climate Resilience
Nuclear Generation Safety | | Background •Chief Emergency Management Officer, One Concern, Inc. (Emergency management technology) Prior Positions:
Mr. Fugate was appointed by President Barack Obama (2017 to serve as the 2022)
•Senior Instructor and Advisor, U.S. Army Civilian Emergency Management Program (2017 to present) •Administrator of the Federal Emergency Management Agency (FEMA) from May 2009(Appointed by the President, Senate Confirmed) (2009 to January 2017. Prior to that, he served as Florida Governor Jeb Bush’s Emergency Management Director (2001 to 2009).Other Board Experience:
Mr. Fugate currently serves on the board of America’s Public Television Stations (2018 to present).
2017) Experience, Skills, and Expertise: Expertise Mr. Fugate has an unparalleleda deep background in emergency management and crisis response at the county, state, and federal level. In addition to being the Chief Emergency Management Officer at One Concern, he is also a Senior Advisor at the Pew Trust for Flood Prepared Communities and a Consultant for Resilient Force, among other positions. During his time at FEMA, Mr. Fugate led the organization through multiple record-breaking disaster years and oversaw the Federal Government’s response to major events, such as the Joplin and Moore tornadoes, Hurricane Sandy, Hurricane Matthew, and the 2016 Louisiana flooding. Mr. Fugate also demonstrates leadershiphas a strong track record in establishing a strongrobust safety culture and driving a community-oriented approach to emergency management. Other Board Service •America’s Public Television Stations (2017 to present) |
| | |
 | | Dean Seavers
Age: 60
Director Since: July 2020, Independent non-executive Chair of the Utility Board since July 2020.
Current Board Committees: Executive (Chair, Utility committee), Finance (Chair), Nominating and Governance, Safety and Nuclear Oversight
Most Recent Position: President and Executive Director, National Grid
Prior Positions:
Mr. Seavers served as the President of National Grid US and Executive Director of National Grid plc, a multinational electric and gas utility, from December 2014 to January 2020, where he led business transformation initiatives to improve financial performance, safety, and employee engagement. Prior to that, he was the founder and CEO of Red Hawk Fire & Security (facilities services) (2012 to 2018), President of Global Services at United Technologies Fire and Security (2010 to 2011), and President and CEO of GE Security (electronic security and fire systems) (2007 to 2010).
Other Public Company Board Experience:
Mr. Seavers has served on the boards of James Hardie Industries plc (building materials) since February 2021, and Albemarle Corporation (specialty chemicals) since 2018.
Experience, Skills, and Expertise:
Mr. Seavers brings a broad utility and safety background to the Boards of the Corporation and the Utility, as well as utility leadership experience. He has a deep background in risk management and operational planning in large customer-oriented companies, and understands the needs of employees and workforce safety. During his tenure at National Grid, he led the implementation of National Grid’s jurisdictional model which placed operational control with jurisdictional presidents, which is particularly relevant as PG&E moves to decentralize operations in order to drive a customer focus.
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2021 Joint Proxy Statement | 14 |
 | |
| | Director Since: January 2021Since | Age | | Current Board Committee: Committees |
| January 2021 | 54 | | |
| Current Position: Position Chief Executive Officer, PG&E Corporation Prior Positions:
Ms. Poppe served as
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| | |
Skills Matrix
Workforce and/or Public Safety
Utility Operations or Related Engineering Experience
Labor Relations | | Background •Chief Executive Officer, PG&E Corporation (2021 to present) •President and CEO ofChief Executive Officer, CMS Energy Corporation and its principal subsidiary, Consumers Energy Company, from July 2016(2016 to December 2020, where she focused on connecting the utility more closely with its customers and adapting lean operating system principles throughout the business. In her decade-long career with CMS Energy, she held various leadership positions, including Senior Vice President of Distribution Operations, Engineering and Transmission; Vice President of Customer Experience, Rates and Regulation; and Vice President of Customer Operations. Prior to her tenure at CMS, she served as a Power Plant Director at DTE Energy Company (2005 to 2010).Other Public Company Board Experience:
Ms. Poppe currently serves on the board of Whirlpool Corporation (2019 to present).
Other Company Board Experience:
Ms. Poppe also serves on the board of AEGIS Insurance Services, Inc. (2019 to present), and on the executive committees for the Edison Electric Institute and the American Gas Association.
2020) Experience, Skills, and Expertise: Expertise Ms. Poppe brings over 15 years of experience, including as chief executive, in the highly regulated utility industry. Under her leadership, CMS Energy and Consumers Energy earned consistent industry recognition and maintained strong operational and financial performance. PG&E values Ms. Poppe’s extensive utility experience championing safety and workplace equity, developing strong working relationships with labor, and building broad support for clean energy. She demonstrates a commitment to the community through her board work supporting the California Chamber of Commerce. Public Company Board Service •Whirlpool Corporation (2019 to present) Other Board Service •California Chamber of Commerce (2022 to present) •Electric Power Research Institute (2021 to present) •Institute of Nuclear Power Operations (2021 to present) •AEGIS Insurance Services, Inc. (2019 to present) •Edison Electric Institute (2016 to present)
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| 2023 Joint Proxy Statement | 20 |
| | | | | | | | | | | | | | | | | |
 William L. Smith | | William M. Smith
Age: 63
Director Since: October 2019 Since | Age | | Current Board Committees: Executive, Committees |
| October 2019 | 65 | | •Finance Technology and CybersecurityMost Innovation (Chair)
•Safety and Nuclear Oversight •Executive |
| Recent Position:Position Retired President of AT&T Technology Operations, AT&T Services, Inc. Prior Positions:
Mr. Smith served as the interim CEO of
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| | |
Skills Matrix
Technology and Cybersecurity
Utility Operations or Related Engineering Experience
Large Scale Customer Experience | | Background •Interim Chief Executive Officer, PG&E Corporation from July 2020 to December 2020, following the Company’s emergence from Chapter 11, providing stability and leadership during a time of transition. Prior to that, he was the (2020) •President, of Technology Operations at(2014 to 2016); President, Network Operations (2008 to 2014), AT&T Services, Inc. (telecommunications) where he spent 37 years (1979 to 2016). Mr. Smith previously served on the advisory boards of Blue Ridge Networks, Inc. (telecommunications) (2018 to 2020) and ASOCS Ltd., (telecommunications) (2018 to present).Other Public Company Board Experience:
Mr. Smith previously served as a director of Oclaro, Inc. (telecommunications) (2009 to 2012, 2018).
Other Board Experience:
Mr. Smith currently serves on the board of Tillman Infrastructure, LLV. (infrastructure) (2017 to present).
(Telecommunications) Experience, Skills, and Expertise: Expertise Mr. Smith brings in-depth knowledge of PG&E’s operations to the Boards, along withhaving served as the Interim Chief Executive Officer in 2020 while PG&E Corporation searched for a background in implementationlong-term leader. He also brings decades of technology, and innovation on large scale operations. Mr. Smith also brings an ability to identifystrategy experience from his 37-year tenure at AT&T. This includes large-scale integration and leveragemodernization of vast infrastructure networks, identification and implementation of new technologies, to meet future business needs, experience in cybersecurity and risk management, knowledge of financial planning, and a track record of delivering on commitments to public and employee safety. Additionally, Mr. Smith offers expertise in cybersecurity, having led the operational cybersecurity team at AT&T and having had significant interaction with the NSA, FBI, and DHS on cyber matters. Past Public Company Board Service •OCLARO, Inc. (2012 to 2018) Other Board Service •Tillman Networks LLC (2017 to present) (Chair of the Board) |
2021 | | | | | |
| 2023 Joint Proxy Statement | 1521 |
Diversity
Diversity is a core value for us, as demonstrated by the composition of our Boards, and one that we will continue to champion in the future. PG&E asks the continuing directors to self-identify using the following categories of underrepresented communities (reflecting those listed in California’s Assembly Bill 979 on board diversity, and of interest to the companies’ stakeholders: Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, Alaska Native, North African, or Middle Eastern, or gay, lesbian, bisexual, transgender, or other member of the queer community. The Sustainability and Governance Committee and the Boards annually review whether the diversity represented by the members of the Boards serves the needs of the companies, as part of the Director Refreshment Process, which is described more on page 24. If a diversity gap is identified, then as Board vacancies arise the Sustainability and Governance Committee will consider and prioritize the need to close that gap, along with other factors, in its director recruitment process.
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| | | | Committee Memberships | Other Public Boards |
| Independent | Diverse | Tenure | A | FI | PC | SNO | SG | |
| Class A | | | | | | | | | |
| Cheryl F. Campbell | • | G | 4 | | | | * | • | 1 |
| Kerry W. Cooper | • | G | 2.75 | | • | • | | | 2 |
| Arno L. Harris | • | CAU | 2.75 | • | | | | • | |
| Carlos M. Hernandez | • | HSP | 1 | • | • | | | | |
| Michael R. Niggli | • | CAU | 2.75 | | | • | • | | 2 |
| Sumeet Singh | | API | 0 | | | | | | |
| Benjamin F. Wilson | • | AA | 2.75 | * | | | | • | |
| Class B | | | | | | | | | |
| Rajat Bahri | • | API | 2.75 | • | • | | | | |
| Edward G. Cannizzaro | • | HSP | 0 | • | • | | | | 1 |
| Jessica L. Denecour | • | G | 2.75 | | | • | • | * | |
| Mark E. Ferguson III | • | CAU | 2.75 | | | * | • | | 1 |
| Robert C. Flexon | • | CAU | 2.75 | • | • | | | | 2 |
| W. Craig Fugate | • | CAU | 2.75 | | | | • | • | |
| Patricia K. Poppe | | G | 2 | | | | | | 1 |
| William L. Smith | • | CAU | 3.5 | | * | | • | | |
| | | | | | | | | | | | | | | | | |
API = Asian, Pacific Islander | AA = African American | CAU = Caucasian | HSP = Hispanic/Latinx | G = Gender Diversity | * = Chair |
A= Audit Committees | FI= Finance and Innovation Committee | PC = People and Compensation Committee | SNO = Safety, Nuclear, and Oversight Committees | SG = Sustainability and Governance Committee | |
Our Board and management reflect our commitment to diversity in the following roles:
Back to Contents | | | | | | | | | | | | | | | | | | | | | | | |
| • | Corporation Chief Executive Officer | | • | Utility Chief Operating Officer | | • | Independent Chair of Utility Board of Directors |
| • | Chair of Audit Committee | | • | Chair of Safety and Nuclear Oversight Committee | | • | Chair of Sustainability and Governance Committee |
DIRECTOR NOMINEE SELECTION
In July 2020,
| | | | | |
| 2023 Joint Proxy Statement | 22 |
Independence
On each company seated 11 newof PG&E Corporation’s and the Utility’s Boards, all of the current non-employee directors are independent as defined by the New York Stock Exchange (NYSE). The definitions of independence found in the Corporation and Utility’s Corporate Governance Guidelines reflect the applicable NYSE definitions and are available on that company’s website.
PG&E Corporation and the Utility also have determined that from January 1, 2022, to the date of this Joint Proxy Statement, each of the following past directors was independent while serving on the Boards, according to the applicable company’s Corporate Governance Guidelines: Dean L. Seavers.
We found no transactions or relationships that would compromise any non-employee director’s general independence during 2022 and thus required the Boards’ consideration and review.
There are no familial relationships between any director of the Corporation or the Utility, executive officer of the Corporation or the Utility, or person nominated or chosen to become a director or executive officer of the Corporation or the Utility.
Skills
Our Boards exhibit diversity of experience, skills, and attributes, and this allows them to effectively oversee the companies’ operations. Key Board members after a comprehensive search conducted by two leading national independent search firms, with specific mandates to identify diverse candidates. Three existing Board members remained on each Board. All Board members were selected based onleaders have substantial expertise in areas such as wildfire mitigation, natural gas operations, risk management, and cybersecurity. The Sustainability and Governance Committee reviews, and the Boards approve, the skills matrix annually, taking into account the current composition of the Boards and the criteria approved by orpreviously agreed upon with our regulators and key stakeholders and regulators.
| | | | | | | | | | | | | | |
| Skills Matrix |
| • | Wildfire safety, preparedness, prevention, mitigation, response, and/or recovery | | • | Workforce safety and public safety |
| • | Technology and cybersecurity | | • | Nuclear generation safety |
| • | Natural gas transmission, distribution, operation, and safety | | • | Public policy (legal, regulatory, or government) |
| • | Leadership in the energy or utility industry | | • | Utility operation or related engineering experience |
| • | Innovation and technology in the clean energy or utility industry | | • | Risk management (including enterprise risk management) |
| • | Climate change mitigation or climate resilience | | • | Renewable energy and related engineering experience |
| • | Financial performance and planning | | • | Financial literacy |
| • | Audit | | • | Management incentives |
| • | Labor relations | | • | Large-scale customer experience |
| • | Public company board experience | | • | Community leadership |
GOVERNANCE
We believe our current governance practices provide the foundation for excellence. Our practices include:
| | | | | | | | | | | | | | |
| • | All non-executive directors are independent, including Board chairs | | • | Regular executive session meetings without management |
| • | All independent committees (other than Executive Committees) | | • | Separation of leadership roles of the Chairman of the Board and the Chief Executive Officer |
| • | Proxy access provisions consistent with market standards—three percent for three years | | • | Executive and director stock ownership guidelines |
| • | Director over-boarding policy prohibiting service on more than three public company boards | | • | No supermajority vote requirements |
| • | Majority vote for directors, with mandatory resignation policy and plurality carve-out for contested elections | | • | One share, one vote |
| • | Board oversight of key areas, including risk, cybersecurity, safety, sustainability, climate resilience, compliance, and ethics | | • | No anti-takeover poison pill — shareholder approval required for adoption |
| • | Annual Board and Committee evaluations | | • | Confidential voting policy for uncontested elections |
| • | Ongoing director education | | • | Policy limiting obtaining certain types of services from the independent auditor |
Many of our governance practices are documented in the Corporate Governance Guidelines adopted by the Boards of PG&E Corporation and the Utility and available on our website. These Guidelines are reviewed annually and updated as recommended by the Sustainability and Governance Committee.
| | | | | |
| 2023 Joint Proxy Statement | 23 |
Leadership Structure
Each company’s Board maintains a flexible policy regarding board leadership structure, including diversity, skills, experience,whether the offices of Chair and their understandingCEO (or President, if the office of CEO is not filled) should be separate and, if the roles are separate, whether the Chair should be elected from management or from among the non-management directors. The Board regularly assesses the appropriateness of the needsBoard’s leadership structure at least annually, and when there is a vacancy in the positions of Californians. Their appointments were reviewedeither the Chair or the CEO (or PEOs), given the specific facts at the time of assessment including, for example, regulatory requirements, the skills, expertise, and supported broadly,experience of individuals serving as Chair or CEO, and corporate structural needs.
At both PG&E Corporation and the Utility, the Chair of the Board is independent. The Chair’s primary duties are to preside over meetings of the Board, including special meetings and set meeting agendas. For joint meetings of both companies’ Boards, the PG&E Corporation Chair performs these functions. Additionally, the Chair is consulted regarding each Board’s nominees and the composition and chairmanship of Board committees. At both companies, the independent directors meet at each regularly scheduled Board meeting in executive session. These executive session meetings generally are chaired by the Governorindependent Chair, who also establishes the agenda for each executive session meeting and determines which, if any, other individuals (including members of California. Thesemanagement) attend each meeting. For joint executive session meetings of both companies’ Boards, the PG&E Corporation Chair performs these functions.
At each company, if the Chair is not independent, then the independent directors must elect a lead independent director from among the independent chairs of the standing PG&E Corporation and Utility Board members representcommittees. Currently, each company has an independent Chair, and so neither company has a lead independent director.
At PG&E Corporation, the companies’ commitmentpositions of Chair and CEO have been separated since March 2017. Since July 2020, Robert C. Flexon has served as PG&E Corporation’s independent non-executive Chair of the Board, and the positions of Chair and CEO continue to stabilitybe separated. Patricia K. Poppe assumed the role of CEO on January 4, 2021. Continuing to separate the roles will allow Ms. Poppe to continue to focus on the business of PG&E Corporation and its strategic priorities, while Mr. Flexon leads the Board of Directors. | | |
| Pacific Gas and Electric Company |
At Pacific Gas and Electric Company, the positions of Chair and PEO have been separated since January 2008. In December 2022, Cheryl F. Campbell became the independent non-executive Chair of the Utility Board. No single individual serves as
wellthe Utility’s PEO, and the Utility Board has allocated the duties and powers of the office of the Utility President to Sumeet Singh, who since March 1, 2023, has served as
the Utility’s Executive Vice President, Operations and Chief Operating Officer, Marlene Santos, who since March 2021 has served as the Utility’s Executive Vice President and Chief Customer Officer, and Jason Glickman, who since May 2021 has served as the Utility’s Executive Vice President, Engineering, Planning, and Strategy. Separating the roles of Chair and PEO allows the Utility to preserve continuity while continuing to attract and retain top talent and allows customers and other stakeholders to benefit from the complementary skill sets and business experiences of Ms. Campbell, Mr. Singh, Ms. Santos, and Mr. Glickman. As a
visionsubsidiary of
howPG&E Corporation, the
companies can bestUtility also benefits from the fact that Mr. Flexon is a member of the Utility Board. Pursuant to the CPUC’s affiliate rules, no individual may serve
customersas Chair of the Board, CEO, or President, or in
a functionally equivalent position, of both PG&E Corporation and the
future.Utility.
Director Refreshment
Our ongoing process to select directors begins with the PG&E Corporation NominatingSustainability and Governance Committee, whowhich selects the nominees who will be submitted for shareholder vote.
The NominatingSustainability and Governance Committee’s written policy, as reflected in each company’s Guidelines, is to seek nominees with a range of different backgrounds, perspectives, skills, experiences, and fit with Board culture, including characteristics like integrity, ethical standards, judgment, interpersonal skills and relations, communication skills, and the ability to work collaboratively with others. The Guidelines also require the Committee recommendsand Boards to consider important public policy objectives such as diversity, representation from regions PG&E serves, and commitment to California’s climate change goals, and also consider a candidate’s age (in light of each Board’s director retirement policy), applicable legal requirements, and other factors as it deems appropriate given the current needs of the Board and the Company.
The director refreshment process includes an
eligible director for re-election if it believesannual review of the
director would continueincumbent directors’ independence, skills, qualifications, and commitment to
be a productive and effective contributor toserving on the Boards. The
Nominating and Governance Committee makes these assessments together withability to commit to serving on the Boards
is considered broadly and includes an assessment of
each company.all outside commitments.
For new Board nominees, the Sustainability and Governance Committee (in consultation with the Chair of the applicable Board) works with independent search firms (retained by the Boards or the Committee) to identify candidates who are qualified to serveserve. Mr. Hernandez, who is being submitted to shareholders for the first time in 2023, [and Mr. Cannizzaro, who was recently appointed and who demonstrate one or morewill be up for election in 2024] were identified by such a firm. The independent search firm develops lists of candidates that meet the criteria and, as a whole, represent a variety of the pre-determineddesired skills that the Boards have approved as being desirableand attributes, including contributing to meet the companies’ needs. Board diversity.
The companies also accept recommendations for director nominees from a variety of sources, including shareholders, community-based organizations, management, and other
directors. We usedirectors, which are also referred to independent search firms for review. The Committee uses the same criteria,
described below under “Skills,”including diversity and skills on the skills matrix, to review all candidates recommended for nomination at the annual
meetings - meetings—including candidates nominated by
shareholders - shareholders—and
reviewreviews all such candidates at the same time.
| | | | | |
| 2023 Joint Proxy Statement | 24 |
Shareholders may recommend a person for the Committee to consider as a nominee for director of PG&E Corporation or the Utility by writing to that company’s Corporate Secretary. Recommendations must include (a) a description of the candidate (name, age, principal occupation, business address, and residence address), (b) the class and number of shares of the company’s stock owned by the shareholder and the candidate, (c) other information about the candidate that would be in a proxy statement listing the candidate as a director nominee, and (d) any interest of the shareholder in the candidate’s nomination. We may request additional information on the candidate or the shareholder if needed.
DIVERSITY
Diversity is a core value for us as demonstrated by our
Board and Committee Evaluation Process
Our Boards and
onecommittees evaluate their own effectiveness throughout the year. Each Company’s Corporate Governance Guidelines require that
we will continue to champion in the
future.The NominatingSustainability and Governance Committee’s policy, as reflected in each company’s Guidelines, is to seek nominees with a range of different backgrounds, perspectives, skills,Committee oversee the process for evaluating and experiences. The Guidelines further specify that candidates are evaluated based on a range of skills and attributes (see Skills section below), including consideration of important public policy objectives, such as diversity.
We askedassessing the continuing directors to self-identify using the categories of underrepresented communities listed in California’s Assembly Bill 979 (AB 979) on board diversity: Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or gay, lesbian, bisexual, or transgender. 9 of 14 directors of PG&E Corporation, and 10 of 15 directorsperformance of the Utility identifyBoards, including Board committees and each Board’s independent non-executive Chair, and periodically review the process for conducting such evaluations and consider whether such evaluations should be assisted by third parties. For the 2023 board evaluations, the Sustainability and Governance Committee engaged a third party governance consultant as either being memberspart of an underrepresented community or identify as female. More specifically, 5 directors identify as female, 1 as Asian or Pacific Islander,the annual board evaluations. The process included written questionnaires completed by each director and4 as Black or African American (3 on the PG&E Corporation Board). Each company’s continuing Board exceeds the requirements of AB 979.
2021 Joint Proxy Statement | 16 |
Our commitment to diversity extends beyond just seating members from under-represented communities on our Boards - it also includes representation on key leadership positions on the Boards:
• | Corporation ChiefExecutive Officer | | • | Utility Chief Operating Officer | | • | Independent Chair of UtilityBoard of Directors/ Chairof Finance Committee |
• | Chair of Audit Committee | | • | Chair of Safety andNuclear Oversight Committee | | • | Chair of Technology andCybersecurity Committee |
The Committee and the Boards annually review whether the diversity represented by the members of the Boards servesexecutive officer team and in-depth director and executive management interviews. The consultant sought and provided feedback about individual directors. Topics included board duties and responsibilities, board composition and leadership, board process, and culture. A summary was provided to leadership and the needs of the companies, given the current operating environment. If a diversity gap is identified, the Committee will consider and prioritize the need to close that gap, along with other factors, in its director recruitment process.
SKILLS
Our Boards exhibit diversity of experience, skills, and attributes, and this allows them to effectively oversee the companies’ operations. As part of the establishment of the Boards in 2020, we agreed that directors should demonstrate one or more of a list of skills specific to our companies' needs (the skills matrix), and key Board leaders would have substantial expertise in areas such as wildfire mitigation, natural gas operations, risk management, and cybersecurity. The NominatingSustainability and Governance Committee, reviews and the Boards approve the skills matrix annually, taking into account the current composition of the Boards and the criteria previously agreed upon with our key stakeholders and regulators.
Each director is nominated after consideration of his or her skills on this list, as well as diversity, character, and fit with Board culture, including characteristics like integrity, ethical standards, judgment, interpersonal skills and relations, communication skills, and the abilitya report was given to work collaboratively with others.both Boards. The Committee and Boards also consider important public policy objectives such as diversity, representation from regions PG&E serves, and commitment to California’s climate change goals, and also considerevaluation process includes a candidate’s age (in light of each Board’s director retirement policy), applicable legal requirements, residency, and such other factors as it deems appropriate given the current needs of the Board and the Company.
2021 Joint Proxy Statement | 17 |
Skills Matrix
• | Wildfire safety, preparedness, prevention, mitigation,response and/or recovery | | • | Workforce safety and public safety |
• | Technology and cybersecurity | | • | Nuclear generation safety |
• | Natural gas transmission, distribution, operation, andsafety | | • | Public policy (legal, regulatory, or government) |
• | Leadership in the energy or utility industry | | • | Utility operation or related engineering experience |
• | Innovation and technology in the clean energy orutility industry | | • | Risk management (including enterprise risk management) |
• | Climate change mitigation or climate resilience | | • | Renewable energy and related engineering experience |
• | Financial performance and planning | | • | Financial literacy |
• | Audit | | • | Management incentives |
• | Labor relations | | • | Large-scale customer experience |
• | Public company board experience | | • | Community leadership |
2021 Joint Proxy Statement | 18 |
INDEPENDENCE
On PG&E Corporation’s Board, all of the current non-employee directors are independent as defined by the NYSE. The definitions of independence foundformal check in the Corporation and Utility’s Corporate Governance Guidelines reflect the applicable NYSE definitions and are availablemid-year on the company’s website.
On the Utility's Board, alleffectiveness of the current non-employee directors are independent as defined by the NYSE. The Utility Board is exempt from NYSE American rules requiring that at least a majority of the directors meet that stock exchange’s definition of “independent director” because PG&E Corporation holds approximately 96 percent of the voting power of the Utility and the Utility is a “controlled” subsidiary.
PG&E Corporation and the Utility also have determined that from January 1, 2020implemented changes to the date of this Proxy Statement, each of the following past directors was independent while servinghelp ensure accountability for improvements.
Service on
theOther Boards
according to the applicable company’s Corporate Governance Guidelines: Richard R. Barrera, Jeffrey L. Bleich, Nora Mead Brownell, Fred J. Fowler, William D. Johnson, Michael J. Leffell, Dominique Mielle, Meridee A. Moore, Eric D. Mullins, Kristine M. Schmidt, and Alejandro D. Wolff.We found no transactions or relationships that would compromise any non-employee director’s general independence during 2020. We considered that (1) during 2020 the Utility paid membership fees (less than $10,000) to a non-profit entity on which one of the companies’ non-employee directors served as interim executive officer at the beginning of 2020; and (2) that one former non-employee director had a family member who is a non-partner executive at the companies’ independent auditor, but who did not provide audit or attest services.
There are no family relationships between any director of the Corporation or the Utility, executive officer of the Corporation or the Utility, or person nominated or chosen to become a director or executive officer of the Corporation or the Utility.
COMMITMENT TO OUR BOARD
During 2020, there were 38 meetings of the PG&E Corporation Board. Each of the current Corporation directors attended 95 percent or more of the aggregate of all meetings of the Corporation Board and of the Corporation Board committees held during the time in which that director served during 2020.
During 2020, there were 38 meetings of the Utility Board. Each of the current Utility directors attended 95 percent or more of the aggregate of all meetings of the Utility Board and of the Utility Board committees held during the time in which that director served during 2020.
Under each company’s Guidelines, directors are expected to attend annual meetings of that company’s shareholders. There was no annual meeting held in 2020 for either company, due to the companies’ Chapter 11 proceedings.
SERVICE ON OTHER BOARDS
If a director is considering serving on the board of another public company (in addition to PG&E Corporation, the Utility, and their respective subsidiaries), that director must inform the Chair of the
NominatingSustainability and Governance Committee and the Chair of the Board of the Corporation and/or the Utility, as applicable, before accepting membership on any such board. Unless otherwise approved by the applicable Board, (1) a director may not serve on more than three public company boards (in addition to the Corporation and Utility Boards) and (2) a director who is the
principal executive officerPEO of a public company (including the Corporation and the Utility) may not serve on more than two public company boards in addition to the board of his or her employer. For these purposes, the Boards of the Corporation and the Utility would count as one board.
If an Audit Committee member simultaneously serves on the audit committees of three or more public companies other than PG&E Corporation, the Utility, and their respective subsidiaries,
thatthe Committee member must inform the applicable company’s Board. In order for that member to continue serving on the Audit Committees, each Board must affirmatively determine that the simultaneous service does not impair that committee member’s ability to serve effectively on the applicable Audit Committee.
All members of the Boards are in compliance with the above policies regarding service on other public company boards, as well as on audit committees of other public company boards.
2021 Joint Proxy Statement | 19 |
Our Governance Practices
We believe our current governance practices provide the foundation for excellence. Our practices include:
• | All non-executive directors are independent, includingBoard chairs | | • | Regular executive sessions without management |
• | All independent committees (other than ExecutiveCommittees) | | • | Ongoing director education |
• | Proxy access provisions consistent with market standards | | • | Board oversight of key areas, including risk,cybersecurity, safety, sustainability, and compliance andethics |
• | Director over-boarding policy prohibiting service onmore than three other boards | | • | Executive and director stock ownership guidelines |
• | Majority vote for directors, with mandatory resignationpolicy and plurality carve-out for contested elections | | • | One share, one vote |
• | Policy limiting obtaining certain types of services fromthe independent auditor | | • | Board input into agendas |
• | Annual Board and Committee evaluations | | • | Confidential voting policy for uncontested elections |
• | No anti-takeover poison pill - shareholder approvalrequired for adoption | | • | No supermajority vote requirements |
Many of our governance practices are documented in the Guidelines adopted by the Boards of PG&E Corporation and the Utility and available on our website. These Guidelines are reviewed and updated from time to time as recommended by the Nominating and Governance Committee.
LEADERSHIP STRUCTURE
PG&E Corporation
The positions of Chair and principal executive officer have been separated since March 2017. In July 2020, Robert C. Flexon became the independent non-executive Chair of the Corporation Board. The Corporation Board believes that it is appropriate to separate the Chair and CEO positions, so that the PG&E Corporation CEO (Ms. Poppe) can focus on management of the business and execution of key strategic initiatives, while Mr. Flexon leads the Board’s independent oversight of management.
Mr. Flexon’s responsibilities include presiding over meetings of the Corporation Board, including special meetings, as well as executive session of the Corporation’s independent directors and concurrent executive session meetings of the Corporation and Utility Boards.
Pacific Gas and Electric Company
The positions of Chair and principal executive officer have been separated since January 2008. In July 2020, Dean L. Seavers became the independent non-executive Chair of the Utility Board. As of March 2021, no single individual serves as the Utility’s principal executive officer, and the Utility Board has allocated the duties and powers of the office of the Utility President to both Adam L. Wright, who since February 2021 has served as the Utility’s Executive Vice President, Operations and Chief Operating Officer, and Marlene Santos, who since March 2021 has served as the Utility’s Executive Vice President and Chief Customer Officer. Separating the roles of Chair and principal executive officer allows the Utility to preserve continuity while continuing to attract and retain top talent and allows customers and other stakeholders to benefit from the complementary skill sets and business experiences of Mr. Seavers, Mr. Wright, and Ms. Santos. As a subsidiary of PG&E Corporation, the Utility also benefits from the fact that Mr. Flexon is a member of the Utility Board. Pursuant to the CPUC’s affiliate rules, no individual may serve as Chair of the Board, CEO, or President, or in a functionally equivalent position, of both PG&E Corporation and the Utility.
Mr. Seavers’ responsibilities include presiding over meetings of the Utility Board only, including special meetings and executive session.
2021 Joint Proxy Statement | 20 |
Lead Independent Director
At each company, if the Chair is not independent, then the independent directors must elect a lead independent director from among the independent chairs of the standing PG&E Corporation and Utility Board committees. Currently, each company has an independent Chair, and so neither company has a lead independent director.
COMMITTEES AND MEMBERSHIP
Committee Responsibilities
The Boards of PG&E Corporation and the Utility have permanent standing committees, which support each Board’s basic responsibilities, with formal charters that set forth their responsibilities. Each Board also may establish temporary ad hoc committees, subcommittees, or other informal governing bodies from time to time.
Where a committee exists at PG&E Corporation only, that committee’s responsibilities include assisting and advising the Utility Board on matters within the committee’s scope of responsibility.
As the needs of the enterprise change, the composition and responsibilities of the committees may change, particularly as the inter-connected nature of many of the responsibilities continues to manifest. Consolidation of some of the committees may allow for directors to apply their skills more broadly and to connect related oversight responsibilities.
| | | | | | | | | | | |
| Committee Name | Company | Primary Duties/Scope of ResponsibilityResponsibility/Topics Discussed |
| Executive | PG&E Corporation and Utility | Exercises powers and performs duties of the applicable Board, subject to limits imposed by state law. |
Audit(1) | PG&E Corporation and Utility | Oversees and monitors: |
| | • | Integrity of the company financial statements, and financial and accounting practices |
| | • | Internal controlscontrol over financial reporting, and external and internal auditing programs |
| | • | Selection and oversight of the companies’ Independent Auditor |
| | • | Review and oversee the compliance and ethics program, including but not limited to, evaluating the effectiveness of such program |
| | • | Compliance with legal and regulatory requirements, in concert with other Board committees |
| | • | Related party transactions |
Compensation | | • | Oversees guidelines and policies for risk management, and the allocation of specific risks to committees for oversight |
| | | | | |
| 2023 Joint Proxy Statement | 25 |
| | | | | | | | | | | |
| Committee Name | Company | Scope of Responsibility/Topics Discussed |
| People and Compensation | PG&E Corporation | Oversees matters relating to compensation and benefits, including: |
| • | • | Compensation for non-employee directors |
| | • | Development, selection, and compensation of policy-making officers |
| | • | Annual approval of the corporate goals and objectives of the PG&E Corporation CEO and the Utility CEO (or if that position is not filled, the principal executive officer(s))PEOs) |
| | • | Management evaluation and officer succession planning |
| | • | Employment, compensation, and benefits policies and practices |
Compliance | | • | Diversity, equity, inclusion, andPublic Policy belonging programs |
Finance and Innovation(2) | PG&E Corporation | Coordinates compliance-related oversight and oversees public policy, sustainability, and corporate responsibility issues, including: |
| | • | The companies’ compliance and ethics program |
| | • | Energy and utility policy positions |
| | • | Environmental protection and sustainability |
| | • | Community relations programs, activities, and contributions |
| | • | Political contributions and political activities |
| | • | Workforce development and diversity and inclusion |
2021 Joint Proxy Statement | 21 |
Committee Name | Company | Primary Duties/Scope of Responsibility |
Finance(2) | PG&E Corporation | Oversees matters relating to financial and investment planning, policies, and risks, including: |
| | • | Financial and investment plans and strategies, including a multi-year financial outlook |
| | • | Dividend policy |
| | • | Proposed capital projects and divestitures |
| | • | Financing plans |
Nominating | | • | Strategic investments in technology, clean energy, andGovernance technology infrastructure |
| | • | Strategic plans and initiatives for potential investments in businesses, joint ventures, mergers, acquisitions, and other business combinations involving the companies |
| Sustainability and Governance | PG&E Corporation | Oversees matters relating to selection of directors, and corporate governance, and Environmental, Social and Governance (ESG) issues, including: |
| | • | Recommendation of Board candidates, including a review of skills and characteristics required of Board members |
| | • | Selection of the chairs and membership of Board committees and the nomination of a lead director of each company’s Board, as necessary |
| | • | Corporate governance matters, including the companies’ governance principles and practices, and the review of shareholder proposals |
| | • | Evaluation of the Boards’ performance and effectiveness |
| | • | Climate change and climate resilience planning |
| | • | Environmental compliance |
| | • | Charitable and political contributions |
| Safety and NuclearOversight | PG&E Corporation and Utility | Oversees matters relating to safety, risk, wildfire safety, and operational performance, including: |
| | • | Safety programs, promotion of safety culture, and long-term and short-term safety plans |
| | • | Wildfire risk reduction and performance against the wildfire safety commitments made by the Utility |
| | • | Operational performance and risks related to the Utility’s nuclear, generation, and gas and electric transmission and distribution facilities |
Technology and Cybersecurity | PG&E Corporation | Oversees matters related to the deployment and use of technology, as well as cybersecurity risks, including: |
| • | | • | Deployment of technology linked to operational performance |
| | • | Cybersecurity measures and controls |
| | • | Evaluation of new technology |
(1) | Established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. |
(2) | Each year, the Finance Committee presents for the PG&E Corporation and the Utility Boards’ review and/or concurrence (1) a multi-year financial outlook for the Corporation and the Utility that, among other things, summarizes projected financial performance and establishes the basis for the annual budgets, and (2) an annual financial performance plan that establishes financial objectives and sets operating expense and capital spending budgets that reflect the first year of the multi-year financial outlook. Members of the Boards receive a monthly report that compares actual to budgeted financial performance and provides other information about financial and operational performance. |
2021 Joint Proxy Statement | 22 |
(1) Established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. (2) Each year, the Finance and Innovation Committee presents for the PG&E Corporation and the Utility Boards’ review and/or concurrence (1) a multi-year financial outlook for the Corporation and the Utility that, among other things, summarizes projected financial performance and establishes the basis for the annual budgets, and (2) an annual financial performance plan that establishes financial objectives and sets operating expense and capital spending budgets that reflect the first year of the multi-year financial outlook. Members of the Boards receive regular reports that compare actual to budgeted financial performance and provides other information about financial and operational performance.
The Audit Committees, the
People and Compensation Committee, and the
NominatingSustainability and Governance Committee are composed entirely of independent directors, as required and defined by the NYSE.
Each of the standing committees (other than the Executive Committees) is composed entirely of independent directors, as defined in the applicable company’s Guidelines and the Committee’s charters.
The Utility is a “controlled” subsidiary of PG&E Corporation for purposes of the NYSE American standards. Therefore, the Utility is not subject to NYSE American rules that otherwise would require that the Utility’s Board committees responsible for executive compensation and governance consist of “independent” directors, and would impose requirements on the Utility’s director nomination and compensation-setting processes.
Each member of the Audit Committees and each member of the
People and Compensation Committee also satisfies heightened independence standards established by SEC rules and applicable stock exchange requirements regarding independence of audit committee members and compensation committee members.
There were no impermissible interlocks or inside directors on the Compensation Committee.
| | | | | |
| 2023 Joint Proxy Statement | 26 |
Each member of the Audit Committees
is also
is financially literate. The following Audit Committee members
also have been identified as audit committee financial experts (and background information for each audit committee financial expert can be found in their director biographies beginning on page
8:14):• | | | | | | | | | | | | | | |
| Rajat Bahri | • | Robert C. Flexon | •Arno L. Harris | Benjamin F. Wilson | Edward G. Cannizzaro |
Members of the Safety and Nuclear Oversight Committees are required to have special expertise in one of the following areas (pursuant to an agreement reached with the CPUC):
• | • Specific substantial expertise related to wildfire safety, wildfire prevention, and/or wildfire mitigation • Specific substantial expertise related to the safe operation of a natural gas distribution company • Specific substantial expertise related to enterprise risk management, including cyber security, and/or experience with nuclear safety Current committee membership for all directors can be found in the table on page 22. The Sustainability and Governance Committee, in consultation with the Chair of the applicable Board and the applicable CEO or PEOs, with consideration of the interests of the individual directors, recommends to the full Board the chairmanship and membership of each committee. Committee chairs are appointed for three years at a time, but may serve consecutive terms. The regular review cadence for committee membership is generally aligned with the Board and committee self-evaluation processes, and committee assignments consider input gathered during such evaluations.
Compensation Committee Interlocks and Insider Participation
There were no impermissible interlocks or inside directors on the People and Compensation Committee.
Orientation and Continuing Education As part of the onboarding of new directors, the PG&E Corporation and Utility Boards host several topic-specific onboarding sessions and a Board meeting, during which the new directors and the continuing directors meet together, and with PG&E officers, to discuss, among other things, the overall context for the companies’ current situation and establish the Boards’ governance framework. Directors regularly receive information on subjects that would assist them in discharging their duties both in formal Board and committee meetings and on an ad hoc basis in response to PG&E or industry events or expressed areas of interest or growth. Topics include business operations, safety, risk management, cybersecurity, corporate governance matters, legal proceedings, the regulatory and policy landscape, sustainability goals and activities, financial performance, and other key stakeholder issues. Each director receives information regarding opportunities for continuing education and is expected to stay current on important developments pertaining to such director’s function and duties to the companies by attending such programs as appropriate or otherwise. Commitment to Our Board During 2022, there were eight meetings of the PG&E Corporation Board and eight meetings of the Utility Board. Board meetings for both Corporation and Utility had an attendance rate of 97 percent in 2022. Each incumbent director attended at least 75 percent of the total meetings of the Boards and the committees on which he or she served. Under each company’s Guidelines, directors are expected to attend annual meetings of that company’s shareholders. All of the directors attended the joint annual meeting held in 2022. | | | | | | | | | | | | | | | | | | | Audit(3) | People & Compensation | Finance & Innovation | Sustainability & Governance | Safety & Nuclear Oversight(1) | | Number of Meetings in 2022 | 5 | 8 | 6 | 4 | 7 | | Attendance | 96% | 100% | 100% | 100% | 100% |
| | | | | | •(3) | Specific substantial expertise related toMeetings of the safe operation of a natural gas distribution companyCorporation and Utility committees are concurrent, and numbers reflect numbers for both committees. |
| | | | | | • | Specific substantial expertise related to enterprise risk management, including cyber security, and/or experience with nuclear safety |
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Shareholder Engagement | | | | | | | | | We value our shareholders’ views and maintain an open and constructive dialogue with shareholders throughout the year.
In 2022, activities included:
•Meetings with large institutional investors •Engagement at industry investor conferences •Quarterly earnings calls and live Q&A •Investor Day and hosted on-site meetings | | |
Leading up to the 2023 Annual Meetings, PG&E reached out to our large institutional shareholders, resulting in direct engagement with shareholders representing more than 35 percent of the total outstanding shares of PG&E Corporation’s common stock. The discussions focused on topics such as operational metrics, contractor safety, ESG, and executive compensation. PG&E Corporation has a record of Board responsiveness to shareholders. Under the companies’ Guidelines, the independent Chairs of the Boards are responsible for responding to written communications that are directed to the Boards from shareholders and other parties. See the “User Guide” section on page 89 for information on how to correspond with directors. OVERSIGHT OVERSIGHT
The Boards oversee and provide guidance on the business strategy and also monitor the performance of the UtilityCorporation and the Corporation.Utility. The Boards have delegated responsibility for day-to-day business operations to senior management.Risk
In 2020, management who in turn provides regular updates to the Boards on progress towards accomplishing strategic goals. Board members are expected to develop and maintain a broad understanding of the companies strategic opportunities and plans. Board members actively participate in the regular updates related to strategic planning and goals, providing insight and direction.
PG&E took significant steps to enhancehas an enterprise risk management including appointingprogram that uses a consistent framework to identify and manage significant risks. The companies work closely with our key regulators on the risk framework, seeking and reflecting their input, and use this framework in rate case proceedings. As a part of the governance structure, the Chief Risk Officer with significant experience in managing operationalis accountable to the CEO and the Board for ensuring that enterprise risk oversight and further strengthening risk-modeling capabilities that informmanagement processes are established and operating effectively, and committee charters authorize the planningChief Risk Officer to provide reports directly to the Safety and executionNuclear Oversight Committees and the Audit Committees. The Boards’ oversight of work to mitigate PG&E’s highest operational risks. PG&E receives regular feedback from the CPUC and other stakeholders about its risk management practices. This feedback is used to continue working to improve the use of quantitative models to distinguish risk at greater levels of detail, including taking into consideration low-frequency, high-consequence events in risk assessment. For example, PG&E has recently developedprograms includes reviewing that programs are designed and implemented machine learning capabilities for its wildfire risk models enabling an evolution from static to dynamic models that are informed by fire ignition probability and potential wildfire consequences, including considering fast-burning fuels, predictive fire behavior, and buildings and population density impacts. The recently implemented risk models further improve upon the fire spread predictive capabilities by incorporating fire scars from actual wildfires, including consideration of prevailing weather conditions, topography, and fuels. These models are being used to inform key wildfire safety measures, such as enhanced vegetation management and system hardening, as part of PG&E’s 2021 Wildfire Mitigation Plan, which is focused on addressing the highest risk areas for mitigation as the top-most priority. The Boards oversee the companies’ enterprise risk management process through reports and discussions regarding key risk areas provided by management at Boardappropriately, and Committee meetings. Enterprise risks are reviewed at least annually byfunctioning as intended. It begins with the Boards’ Audit Committees. The Audit Committees, alsowhich oversee the guidelines and policies that govern the processesprocess by which major risks are identified, assessed and managed, and allocatethus review the full spectrum of key enterprise risks on an annual basis. The Audit Committees’ oversight includes allocation of responsibility for oversight for specifican in-depth review of each enterprise risk categories to various Board committees, consistent withbased on the substantive scope of each committee’s charter. The Safety and Nuclear Oversight Committee have been allocated responsibility over overseeing most of the identified risks. Identified enterprise risks are considered when the companies prepare financial disclosures filed with the SEC.
Management provides regular reports to the Committees on the effectiveness of risk mitigations for each risk, including looking ahead and planning for future conditions, among other things. Management’s risk team and representatives from the lines of business regularly perform horizon scanning exercises, including leverage academic and other third-
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party surveys, to assist in the identification of future threats and trends. Each committee provides a report of its activities to the Boards. The specific allocation of Board-level risk oversight was lastmost recently reviewed by the Audit Committees in December 2020, and is reviewed at least annually.2022. | | | | | | | | | | Board and Committee Risk Oversight Responsibilities | | | Boards: Oversee risks associated with major investments and strategic initiatives and cyber security | | People and Compensation: Oversees potential risks arising from the companies’ compensation policies and practices | Audit:Oversees enterprise risk program, and guidelines and policies that govern the processes by which major risks are assessed and managed. Allocates oversight of specific key risks to CommitteesCommittees. | | Safety and Nuclear Oversight:Oversees risks arising from operations, including wildfire, employee and public safety, electric, gas and generation operations, andother risks associated with facilities, wildfire,emergency response, and emergency responsecybersecurity | Finance Committee: and Innovation: Oversees risks associated with financial markets and liquidity | | TechnologySustainability and Cybersecurity: Governance: Oversees risks associated with cybersecurity and cyber attacks | Compensation Committee: Oversees potential risks arising from the companies’ compensation policies and practices | | Boards: Oversee risks associated with major investments and strategic initiatives climate change |
The Boards’ role in risk oversight was not considered by either Board when assessing that Board’s leadership structure. Cybersecurity
However, each company’s chair has expertise in risk management. Further, the Audit Committees and Safety and Nuclear Oversight Committees play primary roles in Board-level oversight of the companies’ key risks. These committees include either the chair of PG&E Corporation or the chair of the Utility, and the independent Chairs may be consulted regarding composition of these committees respective board’s committee composition. PG&E Corporation and the Utility have identified cybersecurity as a key enterprise risk. Oversight for this risk is exercised jointly by the Technology and Cybersecurity Committee and the Safety and Nuclear Oversight Committees. At each meeting,Committees and the TechnologyBoard of Directors. The Safety and Cybersecurity Committee receives updates fromNuclear Oversight Committees receive a quarterly report and the Board of Directors are briefed annually by PG&E Corporation’s Chief Information Officer or the Utility’s Chief Information Security Officer. These reports describe cybersecurity threats, defenses, mitigation plans, and risk data analytics that impact the companies’ most critical assets, as well as mitigations employed, such as incident response exercises and annual training programs for all employees.assets. The Safety and Nuclear Oversight Committees of both PG&E Corporationalso oversee risk associated with cybersecurity practices employed at Diablo Canyon Power Plant (DCPP), the Utility’s nuclear facility. The Safety and the UtilityNuclear Oversight Committees jointly participate in cybersecurity risk reviews to promote alignment in operations and asset management in the implementation of mitigations designed to reduce the risk of cybersecurity threats. Safety
To manage this risk, our cybersecurity program tracks and aligns with best practice implementation based on the National Institute of Standards and Technology Cyber Security Framework. The Corporation’s and Utility’s cybersecurity program leverages defense-in-depth strategy that employ risk mitigation through implementation of logical and physical security controls to reduce risks. The companies’ cybersecurity program includes the following: • Utilize a number of government and private sources for intelligence, monitoring, and incident response activities. We have a 24x7x365 day security monitoring, intelligence, threat hunting, forensic, and incident response team; • Participate in regular assessments, as well as soliciting external program reviews performed by independent third parties who assess our cybersecurity program maturity every three years; • Conduct annual independent third-party security testing of our internal controls and, as required, external regulatory compliance assessments; • Implement annual cybersecurity training program on information security requirements and best practices that is required of all employees and contractors. Additional security training is required for users with access to our critical infrastructure and specialized security training is provided to our officers; and • Hold ongoing cybersecurity incident response plan review, trainings, and annual cybersecurity incident response exercises. The Utility has not experienced any material breaches due to cybersecurity threats in the last three years. The Boards believe that the safety of employees, contractors, customers, and the public is the top priority for the PG&E Corporation Chief Executive Officer,CEO, the senior management team, and PG&E management. PG&E’s Chief Safety Officer has broad responsibilities to implement safety programs and culture, and as part of the Boards’ oversight function, 2021 Joint Proxy Statement | 24 |
the Boards engage directly with the Chief Safety Officer, Chief Risk Officer and other operational leaders within the companies on the development and implementation of these programs. The Boards’ Safety and Nuclear Oversight Committees that maintain joint responsibility with the Boards for safety oversight at the companies. The Safety and Nuclear Oversight Committees receive regular safety reports from management that include performance metrics, reporting on serious incidents, and actions to improve employee, contractor, customer, and public safety. In 2020,2022, the Boards and their Committees oversaw the Utility’s Wildfire Mitigation Plan. The Safety and Nuclear Oversight Committees continued to receive regular updates on the execution of the Wildfire Mitigation Plan,WMP, engage with senior leadership, and report out to the BoardBoards on a regular basis on progress. In addition, the Chair of the Safety and Nuclear Oversight Committees personally interacts with the CPUC on an ad hoc basis to provide insight on the Wildfire Mitigation Plan.WMP. Other significant focus areas in the past two years have included worker and public safety, safety culture, safe nuclear operations, and evaluation of top enterprise risks, such as risks to key assets, facilities, and technologies. As discussed in the Compensation Discussion and Analysis below (page 42), the Safety and Nuclear Oversight Committees work closely with the People and Compensation Committee in the selection of the safety performance metrics for inclusion in the short-and long-term incentive compensation plans,programs, and in the evaluation of performance to determine individual awards. ESG
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| | | | Sustainability and Corporate Responsibility |
At PG&E, corporate sustainability as business strategy is integral to delivering on the Triple Bottom Linetriple bottom line of people, planet,People, Planet, and prosperityProsperity underscored by strong operational performance. We believePG&E believes that integrating and managing ESG topics, such as addressing climate change, into PG&E’s business strategy creates long-term value for PG&E and for our customers, communities, coworkers, and other stakeholders. Mitigating and adapting to the impacts of climate change presents opportunities for growth for our business and economic opportunity in our communities, andcommunities. It highlights the need to adopt a longer-term perspective about potential risks posed by climate change and to incorporate a resilience mindset and approach. The Boards oversee safety, climate change, and other ESG topics with the support of committees. | | | | | | | | | | The Boards | • | Oversee ESG risks and opportunities, including legislation and the direction of the companies’ cleanopportunities in decarbonization, electric vehicles, greening the gas supply, and helping California define and implement green energy strategies and programs, such as renewable energy, distributed energy resources, and electric vehicle infrastructure.policy | | • | Review corporate goals related to safety, reliability, people management, and people management.sustainability commitments | | • | Participate in ERG events to support the companies’ diversity and inclusion initiatives.initiatives | Compliance and Public Policy | • | Oversees corporate sustainability issues, such as environmental compliance and leadership, climate change resilience, community investments, workforce development, and diversity and inclusion. | | • | Includes annual reviews of PG&E’s sustainability practices and performance. | | Safety and Nuclear Oversight | • | Oversee the risks associated with the impact of climate change on operations, assets and facilities, and planned mitigations.mitigations | | • | Oversee the companies’ programs related to public, employee and contractor safety, and operational excellence.excellence, including training | NominatingSustainability and Governance | • | Oversees consideration of diversity when identifying nominees to the Board.Board | Compensation Committee | • | Oversees corporate sustainability issues, such as environmental compliance and leadership, climate change resilience, and community investments | | • | Includes an annual review of PG&E’s sustainability practices and performance | | People and Compensation | • | Approves incentive compensation structures, which reinforce sustainability commitments.commitments | | • | Oversees diversity and inclusion in workforce planning and management succession.succession | Finance Committeeand Innovation | • | Approves capital budgets and investments in zero-carbon technologies and grid modernization. | Technology and Cybersecurity Committee | • | Oversees technology investments that support a zero-carbon future. modernization |
For additional information regarding PG&E’s sustainability efforts and progress, please see our online Corporate Responsibility and Sustainability Report, 2020, which can be accessed at the sustainability portion of PG&E Corporation’s website at www.pgecorp.com/sustainability.2021 Joint Proxy Statement | 25 |
pgecorp.com/sustainability. Political Contributions
The ComplianceSustainability and Public PolicyGovernance Committee reviewsprovides oversight of the strategy, budget, and direction of PG&E Corporation’s and the Utility’s political contributions and recommends Board approval limits for political contributions from the companies to candidates, measures, initiatives, political action committees, and certain other organizations that may engage in activities involving elections. All political contributions from the companies are made in full compliance with applicable federal, state, and local laws, and regulations. The Compliancecompanies prioritize political contributions that result in support of the companies’ goals of combating climate change, strengthening energy infrastructure, and Public Policyadvancing the companies’ strategic initiatives. The Sustainability and Governance Committee also directs preparation of an annual report, summarizingwhich summarizes political contributions and certain other expenditures made by the companies during the preceding year. In 2021, PG&E Corporation Employees EnergyPAC, funded by PG&E Corporation and Utility employee voluntary contributions, updated its political contributions policy after conducting a series of listening sessions with employees and members. The updated criteria for contributions require candidates to share company values such as diversity and inclusion and the need to protect the environment, and ask whether the candidate is prepared to work in a bipartisan fashion. The new criteria also disqualify candidates who promote hate, violence, or discrimination.
Additional information regarding each company’s political engagement policies and political contributions is available onat pgecorp.com/corp/about-us/corporate-governance/corporation-policies/political-engagement/contributions.page. Oversight of the companies’ compliance and ethics programs rests with the Audit Committees of PG&E Corporation’s websiteCorporation and the Utility. The Audit Committees receive regular reports on the maturity of the companies’ compliance programs. In addition, the Audit Committees review instances of fraud, focusing on the development of effective controls to prevent and detect fraud. As a part of the governance structure, the Chief Ethics and Compliance Officer is accountable to the CEO and the Board, and committee charters authorize the Chief Risk Officer to provide reports directly to the Safety and Nuclear Oversight Committees and the Audit Committees. PG&E’s Code of Conduct applies to all employees and describes our core values, which should be incorporated into every business decision. PG&E also has a Supplier Code of Conduct, as well as a Code of Conduct for members of the Boards of Directors. Additional information regarding our Codes of Conduct is available at www.pgecorp.com/pge-corp.com/corp/about-us/corporate-governance/corporation-policies/ political-engagement.page. MANAGEMENT SUCCESSION
compliance-ethics/program.page . At least annually, the PG&E Corporation and Utility Boards each reviews the applicable company’s plan for CEOPEO succession, both in the ordinary course of business and in response to emergency situations. Each company’s Board also develops profiles of appropriate responsibilities, attributes, and requirements for the principal executive officerPEO positions, which reflect that company’s business functions, vision, and strategy. Potential candidates for principal executive officerPEO positions may be identified internally within the companies in consultation with the People and
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Compensation Committee, (whichwhich oversees the evaluation of management)management, and the PG&E Corporation CEO, as well as externally through various sources, including independent third-party consultants. The succession planning process also addresses the continuing development of appropriate leadership skills for internal candidates for CEO, as well asPEOs and candidates for other leadership positions within the companies. The People and Compensation Committee is responsible for reviewing the CEO’s long-range plans for officer development and succession for PG&E Corporation and the Utility in connection with its review of officer elections, promotions, and compensation matters during the year. Throughout 2020,2022, the People and Compensation Committee addressed management succession and executive development in connection with its review of officer elections, promotions, and compensation matters during the year. EVALUATIONS
Board and Committee Evaluation Process
Our Boards and Committees evaluate their own effectiveness throughout the year. Directors conduct a formal evaluation process annually, developed by the PG&E Corporation Nominating and Governance Committee and administered by the Chair of the Corporation Board, in partnership with the Chair of the Utility Board.
RELATED PARTY TRANSACTIONS Related Party Transactions Policy The Boards carefully evaluate the effectiveness of the Boards, the Committees, and individual directors, and include a formal check in mid-year on the effectiveness of implemented changes to help ensure accountability for improvements.2021 Joint Proxy Statement | 26 |
ORIENTATION AND CONTINUING EDUCATION
Directors regularly receive information on subjects that would assist them in discharging their duties both in formal Board and committee meetings and on an ad hoc basis in response to PG&E or industry events or expressed areas of interest or growth. Topics include business operations; safety, risk management, and cybersecurity; corporate governance matters; legal proceedings and the regulatory and policy landscape; sustainability goals and activities; financial performance; and other key stakeholder issues.
In July 2020, as part of the onboarding of new directors, the PG&E Corporation and Utility Boards hosted several topic-specific onboarding sessions and a Board meeting during which the new directors and the continuing directors met together, and with PG&E officers, to, among other things, discuss the overall context for the companies’ current situation and establish the Boards’ governance framework.
Each director receives information regarding opportunities for continuing education and is expected to stay current on important developments pertaining to such director’s function and duties to the companies by attending such programs as appropriate or otherwise.
SHAREHOLDER ENGAGEMENT
PG&E Corporation and the Utility value our shareholders’ viewseach adopted a written policy (the companies’ Related Party Transaction Policy, or the “Policy”), which generally requires the applicable Audit Committee’s approval or ratification of transactions that would require disclosure under Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934 (“Item 404(a)”), except that the Policy has a lower dollar threshold than Item 404(a). Under the Policy, at the first meeting of each year, each company’s Audit Committee reviews, approves, and/or ratifies related party transactions (other than the types of transactions that are excluded from disclosure under Item 404(a)) with values exceeding $10,000 in which either company participates and are committedin which any “Related Party” has a material direct or indirect interest. For these purposes, “Related Party” generally includes (1) any director, nominee for director, or executive officer, (2) holders of greater than 5 percent of that company’s voting securities, and (3) those parties’ immediate family members. After the annual review and approval of related party transactions, if either company wishes to ongoing constructive dialogueenter into a new related party transaction, then that transaction must be either pre-approved or ratified by the applicable Audit Committee. If a transaction is not ratified in accordance with shareholdersthe Policy, management will make all reasonable efforts to advancecancel or annul that transaction. Where it is not practical or desirable to wait until the long-term viabilitynext Audit Committee meeting to obtain approval or ratification, the Chair of the applicable Audit Committee may elect to approve a particular related party transaction. If the Chair of the applicable Audit Committee has an interest in the proposed related party transaction, then that transaction may be reviewed and approved by another independent and disinterested member of the applicable Audit Committee. In either case, the individual approving the transaction must report such approval to the full Committee at the next regularly scheduled meeting. When reviewing any related party transaction, the Audit Committees consider whether the transaction is on terms comparable to those that could be obtained in arm’s-length dealings with an unrelated third party, and whether the transaction is inconsistent with the best interests of the companies.We regularlycompanies and their shareholders. The Policy also requires that each Audit Committee disclose to the respective Board any material related party transactions.
Since January 1, 2022, all related party transactions have been approved or ratified by the applicable Audit Committee in accordance with this Policy. Related Person Transactions Since January 1, 2022, an affiliate of Fidelity Management and Research Company, LLC (Fidelity) has provided recordkeeper and trustee services for benefit plans sponsored by PG&E Corporation. Fidelity beneficially owns at least 5 percent of PG&E Corporation common stock. In exchange for these services, Fidelity affiliates earned approximately $489,000 in fees during 2022. Such services were initiated prior to Fidelity becoming a 5 percent owner of PG&E Corporation common stock, and PG&E Corporation expects that Fidelity affiliates will continue to provide opportunities for dialogue with shareholderssimilar services and products in the future, at similar levels, in the normal course of business operations. During 2022, BlackRock (and its affiliates) provided asset management services to further promote the exchange of ideas regarding corporate governanceUtility’s nuclear decommissioning trusts, customer credit trust, and other issues. In addition, our outreach effortsvarious trusts associated with the Corporation’s largest shareholders, which collectively holdcompanies’ employee benefit plans. During 2022 BlackRock earned approximately $3.6 million for such services. Such services are provided pursuant to contracts established prior to BlackRock’s disclosure that it had become a majority5 percent owner of PG&E Corporation common stock during 2022. Trust asset management fees are paid by the independent trusts. The Utility expects that BlackRock (and its affiliates) will continue to provide similar services in the future, at similar levels, in the normal course of business. Additionally, BlackRock (and its affiliates) have participated in certain of the outstandingcompanies’ and their affiliates’ bond issuances. In 2022, BlackRock purchased $1.2 billion in bonds from the companies and their affiliates. The companies are not able to predict the extent of BlackRock participation in any bond issuances 2023. On September 22, 2022, PG&E Corporation and Ms. Patricia K. Poppe (who is the Chief Executive Officer of PG&E Corporation) entered into an arrangement under which PG&E Corporation repurchased 57,396 shares of PG&E Corporation common stock include discussionsfrom Ms. Poppe. The shares were repurchased in connection with membersthe forfeiture of senior managementadditional shares to satisfy state tax obligations arising out of a prior vesting of restricted stock units. The shares had a market value of approximately $752,000. Such transfer was consistent with PG&E governance, parameters regarding awards granted under the Long-Term Incentive Plan (LTIP), accounting rules, and tax requirements. No portion of the Boards,arrangement resulted in additional compensation for Ms. Poppe. Kathy Thomason is employed by the Utility as applicable, ongoing meetingsa Strategic Analyst, Principal, and she is the spouse of David S. Thomason, who served as Vice President (VP), Chief Financial Officer, and Controller of the Utility throughout 2022, and ceased to be a related party on January 9, 2023. Since January 1, 2022, Ms. Thomason received compensation and related payments and benefits from the Utility with our investor relations team, and other institutional shareholder forums. PG&E Corporation has a record of Board responsiveness to shareholders. Since the beginning of 2020, the Boards and management have engaged in the following shareholder engagement activities:
• Meetings, calls, and other direct communication
| | • Engagement during Board refreshment
| | • Engagement during quarterly earnings calls and other significant events
| |
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an annual value of approximately $200,000. Any payments to Ms. Thomason for services rendered during 2023 are expected to be similar in nature and value to payments provided during 2022, consistent with the Utility’s policies and practices that apply to employee compensation generally. In connection with the Plan of Reorganization, in July and August 2020, the Utility distributed 477,743,590 shares of PG&E Corporation common stock to the PG&E Fire Victim Trust (Trust). The companies have entered into the following agreements with the Trust: • Amended and Restated Registration Rights Agreement: In addition to various obligations relating to registration of PG&E Corporation common stock (summarized in PG&E Corporation’s Current Report on Form 8-K filed on June 24, 2020 and July 9, 2021), PG&E Corporation is required to pay the fees and expenses for one counsel for the Trust (subject to a cap of $100,000 for the initial registration and for each assisted underwritten offering) in connection with the initial registration and each assisted underwritten offering, but excluding any underwriting discounts or commissions or fees and expenses of the Trust. During 2022, no payments were made. • Tax Benefits Payment Agreement: On July 1, 2020, the Utility agreed to pay to the Trust in cash an aggregate amount of $1.35 billion, comprising (i) at least $650 million of tax benefits for fiscal year 2020 to be paid on or before January 15, 2021 (the “First Payment Date”), and (ii) of the remainder of the $1.35 billion of tax benefits for fiscal year 2021 to be paid on or before January 15, 2022. All payments have been made. •Exchange Transactions: On July 2, 2021, the Corporation, the Utility, an affiliate, and the Trust entered into an agreement pursuant to which the parties committed to entering into one or more share exchange transactions for the exchange of up to an aggregate of 477,743,590 shares of PG&E Corporation common stock issued to the Trust pursuant to the Plan of Reorganization for an equal number of newly-issued shares of PG&E Corporation common stock. During 2022, the Trust conducted five exchange transactions for an aggregate of 230,000 shares of PG&E Corporation common stock.
CORRESPONDENCE
Under the companies’ Guidelines, available on our website, the independent Chairs of the Boards are responsible for responding to written communications that are directed to the Boards from shareholders and other parties. Section 34 of each company’s Guidelines provides more details on these communications.
Correspondence to directors and executive officers should be sent to the applicable company’s principal executive office, in care of the Corporate Secretary. Consistent with procedures adopted and approved by the Boards, the Corporate Secretary will forward to the independent lead director or the independent non-executive Chair any communications addressed to the Board as a body or to all of the independent or non-management directors in their entirety, and such other communications as the Corporate Secretary, in his or her discretion, determines is appropriate. The Corporate Secretary also will receive communications directed to individual directors or officers, including the independent non-executive Chair, and will forward those as appropriate.
The address of the principal executive office for each company is:
PG&E Corporation
Pacific Gas and Electric Company
77 Beale Street, P.O. Box 770000
San Francisco, California 94177
COMPENSATION OF NON-EMPLOYEE DIRECTORS Each of the Boards of PG&E Corporation and the Utility establishes the level of compensation for that company’s non-employee directors, based on the recommendation of the People and Compensation Committee. Directors who serve as employees of either company receive no additional compensation for concurrent service as directors. The People and Compensation Committee periodically reviews the amount and form of compensation paid to non-employee directors of PG&E Corporation and the Utility. As part of this review, the Committee reviews the compensation provided to the companies’ non-employee directors as compared to other comparable U.S. peer companies (including both other utilities and companies within the S&P 250), with the objective of ensuring that non-employee director compensation is:• | Market-competitive in terms of annual compensation value, and | • | Consistent with emerging market practices and trends |
companies. Compensation paid to non-employee directors for 20202022 for service on the Boards and their committees was based upon periodic compensation reviews conducted in consultation with the Committee’s executive compensation consultant for 2020, Pay Governance2022, Meridian Compensation Partners, LLC. The People and Compensation Committee’s most recent reviewsreview of non-employee director compensation werewas conducted in July 2020.Non-Employee Director Total 2020 Compensation Summary
June 2022, and focused on a market comparison of equity structure, Board leadership fees, and stock ownership guidelines, as compared to non-employee director compensation provided at companies in the 2022 Pay Comparator Group used for benchmarking executive compensation. | | | | Non-Employee Director Total 2022 Compensation Summary |
The following framework was in effect from July 1, 2020.during 2022. Additional details are provided in the sections that follow.| Annual Retainer | | Per Quarter | | Annual | | Non-Employee Directors(1) | | $30,000 | | $120,000 | | Corporation Chair of the Board | | $25,000 additional | | $100,000 additional | | Utility Chair of the Board(1) | | $5,000 additional | | $20,000 additional | | Committee Chair Additional Retainers(2) | | | | | | Audit Committees(1) | | $7,500 | | $30,000 | | Compensation Committee | | $5,000 | | $20,000 | | Safety and Nuclear Oversight (SNO) Committees | | $5,000 | | $20,000 | | Finance, Compliance and Public Policy, and Technology and Cybersecurity Committees(1) | | $3,750 | | $15,000 | | Special Committee Additional Retainer | | | | | | As determined by the applicable Board (none paid during 2020) | | | | |
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| | | | | | | | | | | | | | | | Annual Retainer | | Per Quarter | | Annual | Non-Employee Directors(1) | | $30,000 | | $120,000 | | Corporation Chair of the Board | | $25,000 additional | | $100,000 additional | Utility Chair of the Board(1) | | $5,000 additional | | $20,000 additional | Committee Chair Additional Retainers(2) | | | | | Audit Committees(1) | | $7,500 | | $30,000 | | People and Compensation Committee | | $5,000 | | $20,000 | | Safety and Nuclear Oversight (SNO) Committees | | $5,000 | | $20,000 | Finance and Innovation and Sustainability and Governance Committees(1) | | $3,750 | | $15,000 | | Special Committee Additional Retainer | | | | | | As determined by the applicable Board (none paid during 2022) | | | | |
Annual Equity Award(3)Awards | | Non-Employee Directors | | n/a | | $140,000 | Corporation Chair of the Board(1) | | n/a | | $80,000 additional | Per-MeetingPre-meeting Fees | | No meeting fees for attendance at Board, Board committee, or shareholder meetings | | | | | Special Committee Per-Meeting Fees(1) | | | | | As determined by the applicable Board (none paid during 2020)2022) | | | | |
(1) | (1)No additional retainer, equity award, or per-meeting fee will be paid by the Utility for any quarter during which the director is paid a retainer, equity award, or per-meeting fee from the Corporation for the same role. (2) No additional retainer is paid for directors serving as members on Board committees. | | | (2) | No additional retainer is paid for directors serving as members on Board committees. | (3) | For 2020, the value of the annual LTIP award was pro-rated to reflect service from the July 1, 2020 election of new Board members through the anticipated date of the 2021 annual meeting.Retainers |
Retainers and Fees
Retainers and fees (if any) are paid as described in the summary table above. Any director who serves on the PG&E Corporation Board, Audit Committee, Executive Committee, or Safety and Nuclear Oversight Committee does not receive additional retainers for concurrent service on the Utility Board, Audit Committee, Executive Committee, or Safety and Nuclear Oversight Committee, as applicable. Effective July 29, 2020, the following director compensation program changes were implemented:
• | Technology and Cybersecurity Committee Chair retainer of $15,000 introduced in association with the establishment of a new Board committee | | • | Safety and Nuclear Oversight Committees Chair retainer increased from $15,000 to $20,000 reflecting expanded scope of responsibility | • | Audit Committees Chair retainer decreased from $50,000 to $30,000 reflecting market benchmarks | • | Equity awards granted in 2020 were pro-rated to reflect the period of service from July 1, 2020, to May 2021Non-Employee Director Stock-Based Compensation; Compensation Limits |
Non-Employee Director Stock-Based Compensation
Under the 2014 LTIP,2021 Long-Term Incentive Program (LTIP), each non-employee director of PG&E Corporation is entitled to receive annual awards of stock-based compensation. Pursuant to the terms of the 2014applicable LTIP, as approved by PG&E Corporation’s shareholders, the annual value of equity awards provided to any one non-employee director is limited to $400,000 in any calendar year. Awards
Effective June 1, 2021, the maximum aggregate value of equity and cash-based awards to any non-employee director of PG&E Corporation during any calendar year may not exceed $750,000 except that, in the case of a non-employee director who is serving as Chairman of the Board, the annual limit is increased by 200 percent. This limitation was approved by shareholders of PG&E Corporation in connection with the approval of the 2021 LTIP at the 2021 Annual Meeting of Shareholders of PG&E Corporation and the Utility.
| | | | | | | 2023 Joint Proxy Statement | 33 |
LTIP awards for 20202022 were granted on August 3, 2020, and were pro-rated to reflect the fact that most members of the Board were elected on July 1, 2020.May 19, 2022. Each non-employee director’s award—other than that for the Chair of PG&E Corporation—had a total aggregate value of $116,662$140,000 (rounded down to reflect awards equivalent to whole units with values equivalent to whole shares of PG&E Corporation common stock) and consisted of RSUsrestricted stock units (RSUs) that were granted to each non-employee director after his or her election to the Board. The award for the Chair of PG&E Corporation had a total aggregate value of $183,329$220,000 (rounded down to reflect awards equivalent to whole units with values equivalent to whole shares of PG&E Corporation common stock) and consisted of RSUs that were granted after his or her election to the Board. These RSUs will vest at the earlier of May 22, 2021, orthe first anniversary of the date of grant (May 19, 2023), or the 2021 Annual Meetingend of Shareholders (or otherthe director’s annual election of directors)term, and then will be settled as shares of PG&E Corporation common stock. RSUs will also will vest and be settled upon the director’s death or disability, or if there is both a Change in Control (as defined on page A-1)86) and the director ceases to be on the Board for any reason other than the director’s resignation.is terminated. Otherwise, RSUs are forfeited if the director ceases to be a member of the Board prior to vesting. Non-employee directors also may elect to defer settlement of vested RSUs. As approved by the Bankruptcy Court, in lieu of stock-based compensation during 2019, a replacement equity award (Replacement Award) was granted to non-employee directors for 2019. The Replacement Awards were granted at a specified dollar value and settled in post-reorganization equity of PG&E Corporation immediately following emergence from Chapter 11 on June 30, 2020. The Replacement Award values were based on the value of annual equity awards paid to non-employee directors prior to commencement of the Chapter 11 Cases, as specified in the LTIP, and pro-
2021 Joint Proxy Statement | 29 |
| | | | 2022 Director Compensation |
rated for directors who joined the PG&E Corporation Board after the June 2019 annual meeting. The Replacement Awards were granted as dollar values effective November 13, 2019, and covered services as non-employee directors for 2019, but were not converted into stock-based equivalents until emergence from Chapter 11 on July 1, 2020, and thus are reflected in this Proxy Statement, in the 2020 Director Compensation table, below. Replacement Awards were forfeitable upon a separation from service prior to the effective date of the Corporation’s Plan of Reorganization, except in the event of the recipient’s death, disability (as defined in section 409A of the Internal Revenue Code), resignation in connection or anticipation of the confirmation of the Plan of Reorganization, the Nominating and Governance Committee’s approval of vesting in connection with any resignation or removal, or a separation from service relating to a change in control. The Replacement Awards were not reflected in prior tabular disclosures relating to non-employee director compensation granted during 2019.
2020 Director Compensation
The following table summarizes the principal components of compensation paid or granted to individuals for their service as non-employee directors of PG&E Corporation and the Utility during 2020. William L. Smith received compensation in 2020 for his service both as a2022. | | | | | | | | | | | | | | | | | | Name | Fees Earned Or Paid in Cash ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | All Other Compensation ($) | Total ($) | | Rajat Bahri | 120,000 | 139,998 | 0 | 0 | 259,998 | | Cheryl F. Campbell | 140,870 | 139,998 | 0 | 0 | 280,868 | | Kerry W. Cooper | 120,000 | 139,998 | 0 | 0 | 259,998 | | Jessica L. Denecour | 135,000 | 139,998 | 0 | 0 | 274,998 | | Mark E. Ferguson III | 140,000 | 139,998 | 0 | 0 | 279,998 | | Robert C. Flexon | 220,000 | 219,989 | 0 | 0 | 439,989 | | W. Craig Fugate | 120,000 | 139,998 | 0 | 0 | 259,998 | | Arno L. Harris | 120,000 | 139,998 | 0 | 0 | 259,998 | Carlos M. Hernandez(4) | 97,000 | 139,998 | 0 | 0 | 236,998 | | Michael R. Niggli | 120,000 | 139,998 | 0 | 0 | 259,998 | Dean L. Seavers(5) | 148,261 | 139,998 | 0 | 0 | 288,259 | | William L. Smith | 120,652 | 139,998 | 0 | 0 | 260,650 | | Benjamin F. Wilson | 150,000 | 139,998 | 0 | 0 | 289,998 |
(1) Represents receipt of retainers described above under “Non-Employee Director Total 2022 Compensation Summary.” (2) Represents the grant date fair value of equity awards granted to non-employee director and as Interim CEO and Presidentdirectors of PG&E Corporation from June 30 toin 2022, measured in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation—Stock Compensation” (“FASB ASC Topic 718”). Grant date fair value for RSUs is measured using the closing price of PG&E Corporation common stock on the date of grant. Each non-employee director elected at the 2022 Annual Meetings of Shareholders of PG&E Corporation and the Utility—except the Chair of the PG&E Corporation Board—received 11,532 RSUs with a grant date value of $139,998. The Chair of the PG&E Corporation Board received 18,121 RSUs with a grant date value of $219,989. The aggregate number of stock awards outstanding for each non-employee director at December 31, 2020. In accordance with SEC guidance, all compensation paid to2022 was: Mr. Bahri, Ms. Campbell, Mr. Cooper, Ms. Denecour, Admiral Ferguson, Mr. Fugate, Mr. Harris, Mr. Hernandez, Mr. Niggli, Mr. Seavers, Mr. Smith for his serviceand Mr. Wilson, 11,532 each; Mr. Flexon, 18,121. (3) No stock options were granted in 2022. No option awards were outstanding as non-employee director and as Interim CEO and President is provided only inof December 31, 2022. (4) Mr. Hernandez joined the Summary Compensation Table and other executive compensation disclosures startingBoards on page 69. None ofMarch 11, 2022. (5) Mr. Seavers resigned from the compensation paid during 2020 to Mr. Smith for his service as non-employee director or as Interim CEO and President is reflected in the Director Compensation Table below.| Name | Fees
Earned
Or Paid in
Cash ($)(1) | | Stock
Awards
($)(2) | | Option
Awards
($)(3) | | All Other
Compensation
($) | | Total
($) | | Rajat Bahri(4) | 60,000 | | 116,662 | | | | | | 176,662 | | Cheryl F. Campbell | 137,500 | | 256,663 | | | | | | 394,163 | | Kerry W. Cooper(4) | 60,000 | | 116,662 | | | | | | 176,662 | | Jessica L. Denecour(4) | 67,500 | | 116,662 | | | | | | 184,162 | | Admiral Mark Ferguson III(4) | 70,000 | | 116,662 | | | | | | 186,662 | | Robert C. Flexon(4) | 117,500 | | 183,329 | | | | | | 300,829 | | W. Craig Fugate(4) | 60,000 | | 116,662 | | | | | | 176,662 | | Arno L. Harris(4) | 60,000 | | 116,662 | | | | | | 176,662 | | Michael R. Niggli(4) | 60,000 | | 116,662 | | | | | | 176,662 | | Dean L. Seavers(4) | 77,500 | | 116,662 | | | | | | 194,162 | | Oluwadara J. Treseder(4) | 60,000 | | 116,662 | | | | | | 176,662 | | Benjamin F. Wilson(4) | 75,000 | | 116,662 | | | | | | 191,662 | | John M. Woolard | 127,500 | | 221,663 | | | | | | 349,163 | | Richard R. Barrera(5) | 67,500 | | 140,001 | | | | | | 207,501 | | Jeffrey L. Bleich(6) | 75,000 | | 140,001 | | | | | | 215,001 | | Nora Mead Brownell(5) | 110,000 | | 219,998 | | | | | | 329,998 | | Fred J. Fowler(5) | 60,000 | | 140,001 | | | | | | 200,001 | | Michael J. Leffell(5) | 67,500 | | 140,001 | | | | | | 207,501 | | Dominique Mielle(7) | 85,000 | | 140,001 | | | | | | 225,001 | | Meridee A. Moore(5) | 70,000 | | 140,001 | | | | | | 210,001 | | Eric D. Mullins(5) | 60,000 | | 140,001 | | | | | | 200,001 | | Kristine M. Schmidt(5) | 67,500 | | 140,001 | | | | | | 207,501 | | Alejandro D. Wolff(5) | 60,000 | | 140,001 | | | | | | 200,001 |
(1) | Represents receipt of retainers described above under “Non-Employee Director Total 2020 Compensation Summary.” |
2021 Joint Proxy Statement | 30 |
Boards on December 15, 2022. | | | | Stock Ownership Guidelines |
(2) | Represents the grant date fair value of equity awards granted to non-employee directors of PG&E Corporation in 2020, measured in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation—Stock Compensation” (“FASB ASC Topic 718”). Grant date fair value for RSUs is measured using the closing price of PG&E Corporation common stock on the date of grant. The table above includes two separate equity awards provided in 2020: (i) awards for 2020 and (ii) replacement awards for 2019. |
| (i) | Each non-employee director who was elected effective July 1, 2020 in connection with PG&E Corporation’s emergence from Chapter 11—except the Chair of the PG&E Corporation Board—received 12,820 RSUs with a grant date value of $116,662. The Chair of the PG&E Corporation Board received 20,146 RSUs with a grant date value of $183,329. These values reflect the proration of service from July 2020 through May 2021. The aggregate number of stock awards outstanding for each non-employee director at December 31, 2020 was: Mr. Bahri, Ms. Campbell, Mr. Cooper, Ms. Denecour, Mr. Ferguson, Mr. Fugate, Mr. Harris, Mr. Niggli, Mr. Seavers, Ms. Treseder, Mr. Wilson, and Mr. Woolard, 12,820 each, and Mr. Flexon, 20,146. | | (ii) | Each non-employee director who was elected at the 2019 annual meetings—except the Chair of the PG&E Corporation Board—received a stock award with a grant date value of $140,001, which converted to 15,504 shares of PG&E Corporation stock upon vesting and settlement following emergence from Chapter 11 in July 2020. The Chair of the PG&E Corporation Board received a stock award with a grant date value of $219,998, which converted to 24,363 shares of PG&E Corporation stock upon vesting and settlement. Mr. Woolard, who joined the Board in October 2019, received a stock award with a pro-rated grant date fair value of $105,001, which converted to 11,628 shares of PG&E Corporation common stock upon vesting and settlement. |
(3) | No stock options were granted in 2020. No option awards were outstanding as of December 31, 2020. | (4) | Mr. Bahri, Ms. Cooper, Ms. Denecour, Mr. Ferguson, Mr. Flexon, Mr. Fugate, Mr. Harris, Mr. Niggli, Mr. Seavers, Ms. Treseder, and Mr. Wilson joined the PG&E Corporation Board effective July 1, 2020. These individuals also joined the Utility Board effective July 1, 2020, with the exception of Ms. Denecour, Mr. Flexon, and Mr. Niggli, who joined the Utility Board on October 28, 2020. | (5) | Mr. Barrera, Ms. Brownell, Mr. Fowler, Mr. Leffell, Ms. Moore, Mr. Mullins, Ms. Schmidt, and Mr. Wolff resigned from the PG&E Corporation and Utility Boards effective July 1, 2020. | (6) | Mr. Bleich resigned from the PG&E Corporation and Utility Boards effective May 1, 2020. (7) Ms. Mielle resigned from the PG&E Corporation and Utility Boards effective June 30, 2020. |
Stock Ownership Guidelines
Non-employee directors of PG&E Corporation are expected to own shares of PG&E Corporation common stock having a dollar value of at least five times the value of the then-applicable annual Board retainer. Non-employee directors must hold 100 percent of their qualifying stock holdings until the guidelines are attained. If any non-employee director is on the Utility Board only, then that director also may satisfy his or her stock ownership obligation with Utility preferred stock. Directors generally haveshould achieve this target within five years from the date of their election to meet the guidelines.Board. Ownership includes beneficial ownership of common stock, as well as RSUs and common stock equivalents. These guidelines were adopted to more closely align the interests of directors and each company’s shareholders. Deferral of Retainers and Fees
All non-employee directors comply with these guidelines. Under the PG&E Corporation 2005 Deferred Compensation Plan for Non-Employee Directors, directors of PG&E Corporation and the Utility may elect to defer all of their retainers, all of their meeting fees (if any), or both. Directors who participate in the Deferred Compensation Plan may elect either to (1) convert their deferred compensation into common stock equivalents, the value of which is tied to the market value of PG&E Corporation common stock, or (2) have their deferred compensation deemed to be invested in the Utility Bond Fund, (whichwhich is described in the narrative following the “Non-Qualified Deferred Compensation— 2020”2022” table beginning on page 77).Reimbursement for Travel and Other Expenses
70. As noted above under the discussion of "Non-Employee Director Stock-Based Compensation," non-employee directors also may elect to defer settlement of vested RSUs.
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| | | | Reimbursement for Travel and Other Expenses |
Directors of PG&E Corporation and the Utility are reimbursed for reasonable expenses incurred in connection with attending Board, Board committee, or shareholder meetings, or participating in other activities undertaken on behalf of the Corporation or the Utility. Retirement Benefits from PG&E Corporation or
Effective January 1, 2022, non-employee directors no longer were eligible for certain other miscellaneous benefits, including participation in the Utilitycompanies’ matching charitable contributions programs and eligibility for accidental death and dismemberment insurance. | | | | Retirement Benefits from PG&E Corporation or the Utility |
The non-employee directors of the Boards of PG&E Corporation and the Utility are not provided retirement benefits. 2021 | | | | 2023 Non-Employee Director Compensation Program |
In connection with the People and Compensation Committee’s June 2022 review of the companies’ non-employee director compensation program, PG&E Corporation adjusted the compensation program and, effective January 1, 2023, the following changes took effect: (1) value of annual LTIP awards for most non-employee directors was increased to $180,000 (from $140,000), (2) the additional value of LTIP awards provided to the Chair of PG&E Corporation was increased from $80,000 to $100,000 (such that the Chair of PG&E Corporation receives an annual LTIP award with a total value of $280,000), and (3) the additional retainer provided to the Chair of PG&E Corporation was reduced to $20,000 per quarter ($80,000 annually) from $25,000 per quarter ($100,000 annually).
| | | | | | | 2023 Joint Proxy Statement | 3135 |
Share Ownership Information Our Auditors
ITEM NO. 2: RATIFICATION
SECURITY OWNERSHIP OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FORMANAGEMENT The following table sets forth the number of shares of PG&E CORPORATION AND PACIFIC GAS AND ELECTRIC COMPANYThe Audit CommitteesCorporation common stock beneficially owned (as defined in the rules of the SEC) as of March 7, 2023, by the directors, the nominees for director, the NEOs, and all directors and current executive officers of each of PG&E Corporation and the Utility as a group. As of March 7, 2023, no listed individual owned shares of any class of Utility securities. The table also sets forth common stock equivalents credited to the accounts of directors and executive officers under the Corporation’s deferred compensation and equity plans. Directors and Section 16 Officers of the Corporation and the Utility may not engage in any hedging or monetization transactions that limit or eliminate the officer’s ability to profit from an increase in the value of company stock, and generally are prohibited from pledging company stock as collateral for a loan.
The address of each has selectedperson listed below is c/o PG&E Corporation or Pacific Gas and appointed Deloitte & Touche LLPElectric Company, as applicable, 300 Lakeside Drive, Oakland, CA 94612. | | | | | | | | | | | | | | | | Name | Beneficial
Stock
Ownership(1)(2) | Percent of
Class(3) | Common
Stock
Equivalents(4) | Total | Rajat Bahri(5) | 26,281 | * | 0 | 26,281 | Cheryl F. Campbell(5) | 41,785 | * | 0 | 41,785 | Edward G. Cannizzaro(5) | 0 | * | 0 | 0 | Kerry W. Cooper(5) | 26,281 | * | 0 | 26,281 | Jessica L. Denecour(5) | 26,281 | * | 0 | 26,281 | Mark E. Ferguson III(5) | 26,281 | * | 0 | 26,281 | Robert C. Flexon(5) | 51,299 | * | 0 | 51,299 | W. Craig Fugate(5) | 26,281 | * | 0 | 26,281 | Arno L. Harris(5) | 34,756 | * | 0 | 34,756 | Carlos M. Hernandez(5) | 0 | * | | 0 | Michael R. Niggli(5) | 26,781 | * | 0 | 26,781 | Patricia K. Poppe(5)(6)(8) | 1,269,325 | * | 0 | 1,269,325 | Sumeet Singh(5)(7)(8) | 66,934 | * | 0 | 66,934 | William L. Smith(5) | 199,692 | * | 0 | 199,692 | Benjamin F. Wilson(5) | 0 | * | 26,281 | 26,281 | Julius Cox(8) | 34,390 | * | 0 | 34,390 | Christopher A. Foster(8)(9) | 58,196 | * | 0 | 58,196 | Jason M. Glickman(8) | 0 | * | 0 | 0 | Marlene M. Santos(8) | 165,998 | * | 0 | 165,998 | John R. Simon(8) | 284,437 | * | 160 | 284,597 | David Thomason(8)(10) | 46,253 | | 0 | 46,253 | Adam L. Wright(8)(11) | 47,703 | * | 0 | 47,703 | | All PG&E Corporation directors, director nominees, and current executive officers as a group (21 persons) | 2,392,907 | * | 26,441 | 2,419,348 | | All Utility directors, director nominees, and current executive officers as a group (19 persons) | 2,061,206 | * | 26,441 | 2,087,487 |
* Less than 1 percent (1) This column includes any shares held in the independent auditor forname of the spouse, minor children, or other relatives sharing the home of the listed individuals and, in the case of current and former executive officers, includes shares of PG&E Corporation common stock held in the defined contribution retirement plan maintained by PG&E Corporation. Except as indicated below, the listed individuals have sole voting and investment power over the shares shown in this column. Voting power includes the power to direct the voting of the shares held, and investment power includes the power to direct the disposition of the shares held. This column also includes the following shares of PG&E Corporation common stock in which the listed individuals share voting and investment power: Mr. Harris 8,475 shares, Mr. Simon 281,072 shares, Mr. Thomason 663 shares, all PG&E Corporation directors and executive officers as a group 305,465 shares, and all Utility directors and executive officers as a group 8,475 shares. No reported shares are pledged.
| | | | | | | 2023 Joint Proxy Statement | 36 |
(2) This column includes the following shares of PG&E Corporation common stock that companythe individuals have the right to auditacquire within 60 days of March 7, 2023, through the consolidated financial statementsexercise of vested stock options, the vesting of outstanding RSUs, settlement of vested RSUs that have been deferred, or the settlement of vested phantom stock awards: Ms. Denecour 13,461 shares, Mr. Flexon 21,153, Mr. Foster 12,282 shares, Ms, Santos 106,053, Mr. Simon 43,989 shares, Mr. Thomason 6,354 shares, all PG&E Corporation directors and executive officers as a group 196,938 shares, and all Utility directors and executive officers as a group 143,405 shares. These individuals have neither voting power nor investment power with respect to these shares unless and until they are purchased through the exercise of the options or with respect to the unvested RSUs or phantom stock awards, settled in shares of PG&E Corporation common stock, under the terms of the 2014 LTIP and 2021 LTIP, as applicable. (3) The percent of class calculation is based on the number of shares of PG&E Corporation common stock outstanding as of February 16, 2023, which was 2,466,208,388. Of that number, 1,988,464,798 shares are entitled to vote, and for477,743,590 shares, which is the year ended December 31, 2021,aggregate number of shares owned by PG&E ShareCo LLC and not the Utility, are not entitled to auditvote. (4) This column reflects the effectivenessnumber of internal control over financial reportingstock units that were purchased by listed individuals through salary and other compensation deferrals or that were awarded under equity compensation plans, as well as vested RSUs that have been deferred. The value of December 31, 2021. Deloitte & Toucheeach stock unit is equal to the value of a share of PG&E Corporation common stock and fluctuates daily based on the market price of PG&E Corporation common stock. The listed individuals who own these stock units share the same market risk as PG&E Corporation shareholders, although they do not have voting rights with respect to these stock units. (5) Messrs. Bahri, Cannizzaro, Ferguson, Flexon, Fugate, Harris, Hernandez, Niggli, Smith, and Wilson and Mses. Campbell, Cooper, Denecour, and Poppe, are directors of both PG&E Corporation and the Utility. Mr. Singh is a major national accounting firm with substantial expertisedirector of the Utility only. (6) Ms. Poppe currently serves as CEO of PG&E Corporation, effective January 4, 2021. (7) Mr. Singh currently serves as EVP, Operations and COO of the Utility effective March 1, 2023. (8) Ms. Poppe and Messrs. Foster and Simon are included in the energySummary Compensation Table as NEOs of PG&E Corporation. Ms. Santos and, utility businesses. Deloitte & Touche has servedMr. Wright are included in the Summary Compensation Table as NEOs of both PG&E Corporation and the independent auditors forUtility. Messrs. Cox, Glickman, Singh, and Thomason are included in the Summary Compensation Table as NEOs of the Utility only. (9) Mr. Foster is resigning from his position as EVP and CFO of PG&E Corporation effective May 4, 2023. (10) Mr. Thomason resigned from his positions as CFO of the Utility and Controller of the companies effective January 9, 2023. (11) Mr. Wright resigned from his positions as Board member and EVP, Operations and COO of the Utility effective March 1 ,2023. | | | | Section 16(a) Beneficial Ownership Reporting Compliance |
In accordance with Section 16(a) of the Securities Exchange Act of 1934 and SEC regulations, PG&E Corporation’s and the Utility’s directors and certain officers, as well as persons who own greater than 10 percent of the Corporation’s or the Utility’s equity securities, must file reports of ownership and changes in ownership of such equity securities with the SEC and the principal national securities exchange on which those securities are registered, and must furnish the Corporation or the Utility with copies of all such reports that they file. Based solely on review of copies of such reports received or written representations from certain reporting persons, PG&E Corporation and the Utility since 1999.Onebelieve that during 2022, all filing requirements applicable to their respective directors, officers, and 10 percent shareholders were satisfied. No information is reported for individuals during periods in which they were not directors, officers, or more representatives10 percent shareholders of Deloitte & Touche are expected to be present at the annual meetings. They will have the opportunity to make a statement if they wish and are expected to be available to respond to questions from shareholders.
Each company’s Board believesapplicable company.
| | | | | | | 2023 Joint Proxy Statement | 37 |
PRINCIPAL SHAREHOLDERS The following table presents certain information regarding shareholders that the appointment of Deloitte & Touche is in the best interests of that company and its shareholders.PG&E Corporation and the Utility know are not required to submit these appointments to a votebeneficial owners of their shareholders. However, each Board believes that requesting shareholder ratificationmore than 5 percent of this selection is a good corporate governance practice. Ifany class of voting securities of the shareholders of either PG&E Corporation or the Utility do not ratifyas of March 7, 2023 (except as noted below). | | | | | | | | | | | | | | | | | | | Class of Stock | Name and Address of
Beneficial Owner | | Amount and Nature of
Beneficial Ownership | | Percent
of Class | Pacific Gas and Electric Company stock(1) | PG&E Corporation(2) 77 Beale Street, P.O. Box 770000, San Francisco, CA 94177 | | 264,374,809 | | 96.24% | | PG&E Corporation common stock | The Vanguard Group Inc.
100 Vanguard Blvd.,
Malvern, PA 19355 | | 224,115,552 | (3) | 11.28% | | PG&E Corporation common stock | Capital Research Global Investors
333 South Hope Street, 55th Floor, Los Angeles, CA 90071 | | 200,022,503 | (4) | 10.06% | | PG&E Corporation common stock | PG&E Fire Victim Trust Two Embarcadero Center, Ste. 1500, San Francisco, CA 94111 | | 187,743,590 | (5) | 9.44% | | PG&E Corporation common stock | FMR LLC
245 Summer Street,
Boston, MA 02210 | | 181,252,881 | (6) | 9.11% | | PG&E Corporation common stock | BlackRock, Inc.
55 East 52nd Street,
New York, NY 10055
| | 129,873,577 | (7) | 5.3% | | Pacific Gas and Electric Company first preferred stock | Newtyn Management, LLC
60 East 42nd Street, Ste. 960, New York, NY 10165 | | 1,248,774 | (8) | 12.10% | | Pacific Gas and Electric Company first preferred stock | Shaolin Capital Management LLC
230 NW 24th Street, Ste. 603, Miami, FL 33127 | | 1,125,000 | (9) | 10.90% | | Pacific Gas and Electric Company first preferred stock | Stonehill Capital Management LLC, et al.
320 Park Avenue, 26th Floor, New York, New York, 10022 | | 921,794 | (10) | 8.93% |
(1) The Utility’s common stock and preferred stock vote together as a single class. Each share is entitled to one vote. (2) As of March 7, 2023, the appointment,Corporation held 100 percent of the applicable Audit Committee will investigateissued and outstanding shares of Utility common stock, and no Utility preferred shares. (3) The information relates to beneficial ownership as of December 30, 2022, as reported in a Schedule 13G/A filed with the reasons for rejectionSEC on February 9, 2023, by The Vanguard Group, Inc. (Vanguard). For these purposes, Vanguard has shared voting power with respect to 2,824,833 shares, sole dispositive power with respect to 217,111,132 shares, and shared dispositive power with respect to 7,004,420 shares of PG&E Corporation’s common stock. (4) The information relates to beneficial ownership as of December 30, 2022, as reported in a Schedule 13G/A filed with the shareholdersSEC on February 13, 2023, by Capital Research Global Investors (Capital). For these purposes, Capital has sole voting power with respect to 200,007,559 shares and will reconsidersole dispositive power with respect to 200,022,503 shares of PG&E Corporation’s common stock. (5) In connection with the appointment. Even if a company’s shareholders ratifyPlan of Reorganization, the selection, the applicable Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of that company and its shareholders.The Boards of DirectorsUtility distributed 477,743,590 shares of PG&E Corporation common stock to the PG&E Fire Victim Trust (the Trust). The information relates to beneficial ownership as of January 9, 2023, as reported in a Schedule 13D/A filed with the SEC on January 11, 2023 by the Trust and Pacific GasCathy Yanni, acting solely in her capacity as the trustee of the Trust (in such capacity, the Trustee). For these purposes, the Trust and Electric Company Unanimously Recommendthe Trustee report sole voting power and sole dispositive power with respect to 187,743,590 shares of PG&E Corporation’s common stock.
(6) The information relates to beneficial ownership as of December 30, 2022, as reported in a Vote FORSchedule 13G/A filed with SEC on February 9, 2023, by FMR LLC and Abigail P. Johnson (FMR LLC’s Director, Chairman, and Chief Executive Officer). For these purposes, FMR LLC and Ms. Johnson report sole voting power with respect to 172,179,643 shares and sole dispositive power with respect to 181,252,881 shares of PG&E Corporation’s common stock. (7) The information relates to beneficial ownership as of December 31, 2022, as reported in a Schedule 13G/A filed with the ProposalSEC on February 3, 2023, by BlackRock, Inc. (BlackRock). For these purposes, BlackRock has sole voting power with respect to Ratify118,460,198 shares, and sole dispositive power with respect to 129,873,577 shares of PG&E Corporation’s common stock (8) The information relates to beneficial ownership as of December 31, 2022, as reported in a Schedule 13G/A filed with the AppointmentSEC on February 14, 2023, by (i) Newtyn Management, LLC (Newtyn Management), (ii) Newtyn Partners, L.P., and (iii) Newtyn TE Partners, LP. For these purposes, Newtyn Management has shared voting and shared dispositive power with respect to 1,248,774 shares of Deloitte & Touche.the Utility’s first preferred stock. Newtyn Management is investment adviser to, and thus may be deemed to beneficially own shares of the Utility’s first preferred stock held by, Newtyn Partners, L.P. (which owns and has shared voting and shared dispositive power with respect to 734,440 shares, constituting 7.1 percent of such first preferred stock) and Newtyn TE Partners, LP (which owns and has shared voting and dispositive power with respect to 514,334 shares, constituting 5.0 percent of such first preferred stock). (9) The information relates to beneficial ownership as of December 31, 2022, as reported in a Schedule 13G/A filed with the SEC on February 14, 2023, by Shaolin Capital Management LLC (Shaolin). For these purposes, Shaolin has sole voting and sole dispositive power with respect to 1,125,000 shares of the Utility’s first preferred stock.
2021 | | | | | | | 2023 Joint Proxy Statement | 32 |
INFORMATION REGARDING THE INDEPENDENT AUDITOR FOR PG&E CORPORATION AND PACIFIC GAS AND ELECTRIC COMPANY
Selection and Oversight
(10) The information relates to beneficial ownership as of the Independent AuditorEach Audit Committee is responsible for the appointment, replacement, compensation, and oversight of the work of the independent auditor. The Audit Committees review the scope of the audit, including the terms of the engagement. The independent auditor reports directly to the Audit Committees; at each Audit Committee meeting, the independent auditor meets separatelyDecember 31, 2022, as reported in a Schedule 13G filed with the Audit Committees, without management present.
Annually, each Audit Committee also evaluates the independence, qualifications,SEC on February 22, 2023 by (i) Stonehill Capital Management LLC (Stonehill Management), (ii) Stonehill Institutional Partners, L.P. and performance of the independent auditor, taking into account the opinions of management(iii) John Motulsky, Jonathan Sacks, Peter Sisitsky, Michael Thoyer, Michael Stern, and the internal auditors. To help ensure continuing independence of the independent auditor, the Audit Committees also consider whether there should be rotation of the independent auditor. In accordance with SEC rules, the lead audit partner may provide a maximum number of five consecutive years of service to the companies. Consistent with that requirement, Deloitte & Touche assigned a new lead auditor to lead the integrated audit of PG&E Corporation’sSamir Arora (the “Stonehill Individuals”). For these purposes, Stonehill Management has shared voting and the Utility’s financial statements, starting in 2017. The Audit Committees reviewed and evaluated the new lead auditor as part of their annual process for reviewing the independent auditor.
For 2021, the Audit Committees selected Deloitte & Touche as the companies’ independent auditor, following consideration of the following factors and criteria: (1) status as a registered public accounting firm and is subject to oversight by the Public Company Accounting Oversight Board; (2) status as a “Big Four” public accounting firm, nationally and internationally recognized as an expert in accounting and auditing; (3) having one of the largest utility practices of the “Big Four” public accounting firms; (4) having made a strong commitment to supporting supplier diversity; (5) having significant experience with the companies; and (6) having an experienced team, including the lead partner, familiar with the industry, assigned to the companies’ engagements. The Audit Committees also considered (1) Deloitte & Touche’s quality control report, (2) Deloitte & Touche’s discussion of its independence, and (3) a review of Deloitte & Touche’s proposed audit plan (including draft engagement letter) for 2021.
Although Deloitte & Touche has been the companies’ independent auditor since 1999, in 2015 and at the Audit Committees’ direction, the companies solicited bids from accounting firms to conduct the external audits of the companies’ financial statements for the year ending December 31, 2016. The bids were evaluated by the Auditor Selection Committee, which consisted of members from the companies’ accounting, internal auditing, regulatory, operational, sourcing, and legal functions. The bids were evaluatedshared dispositive power with respect to four key factors: firm capabilities and background, firm resources and audit plan, supplier diversity plans, and pricing. Upon consideration921,794 shares of the information providedUtility’s first preferred stock. Stonehill Management is investment adviser to, and thus may be deemed to beneficially own shares of the Utility’s first preferred stock held by, Stonehill Institutional Partners, L.P. (which owns and has shared voting and shared dispositive power with respect to 546,223 shares, constituting 5.3 percent of such first preferred stock) and the Auditor Selection Committee, each Audit Committee appointed Deloitte & Touche as the independent auditor for the year ending December 31, 2016.
Fees PaidStonehill Individuals (each of whom owns and has shared voting and dispositive power with respect to the Independent Auditor During 2020 and 2019
The Audit Committees have reviewed the audit and non-audit fees921,794 shares, constituting 8.9 percent of such first preferred stock, except that PG&E Corporation, the Utility, and their respective controlled subsidiaries have paidSamir Arora has shared voting power with respect to the independent auditor (including subsidiaries and affiliates), in order to consider whether the nature and relative value of those fees are compatible with maintaining the firm’s independence.
1,672,648 shares).
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Table 1: Fees Billed to PG&E Corporation
(Amounts include Fees Billed to the Utility and its Subsidiaries shown in Table 2 below)
| | 2020 | 2019 | | Audit Fees | $7.962 million | $6.351 million | | Audit-Related Fees | $0.130 million | $0.169 million | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 |
TableProposal 2: Fees Billed to the Utility and its Subsidiaries
(Amounts are included in Fees Billed to PG&E Corporation shown in Table 1 above)
| | 2020 | 2019 | | Audit Fees | $6.953 million | $5.715 million | | Audit-Related Fees | $0.130 million | $0.150 million | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 |
Audit Fees
Audit fees billed for 2020 and 2019 relate to services rendered by Deloitte & Touche and its affiliates in connection with reviews of Quarterly Reports on Form 10-Q; certain limited procedures on registration statements; the audits of the annual financial statements of PG&E Corporation and its subsidiaries and the Utility and its subsidiaries; the audits of both PG&E Corporation’s and the Utility’s internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act; advice regarding adoption of new accounting pronouncements; support for statutory or regulatory filings or engagements and regulators’ reviews of auditor workpapers; procedures related to the California wildfires and participation in the wildfire fund established under Assembly Bill 1054 (AB 1054); and services rendered for post-bankruptcy matters.
The increase in audit fees billed for 2020 as compared to 2019 is primarily due to an increase in billings related to post-bankruptcy matters of approximately $530,000 and an increase related to the Utility’s and PG&E Corporation’s integrated annual audits and quarterly reviews of approximately $285 thousand and $50 thousand, respectively, in 2020.
Audit-Related Fees
Audit-related fees billed in 2020 and 2019 relate to services rendered by Deloitte & Touche and its affiliates for nuclear decommissioning trust audits, consultations on financial accounting and reporting standards, required agreed-upon procedure reports related to contractual obligations of the Utility and its subsidiaries, advice regarding proposed transactions, advice regarding adoption of new accounting pronouncements, training, and advice concerning internal controls surrounding new applications, systems, or activities.
The decrease in audit-related fees billed in 2020 as compared to 2019 is primarily due to a decrease in billings related to consultations on financial accounting and reporting standards in 2020.
Tax Fees and All Other Fees
Deloitte & Touche and its affiliates provided no services in these categories during 2020 and 2019.
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Obtaining Services from the Independent Auditor
Annual Review and Pre-Approval of Services
For each fiscal year, each Audit Committee approves a list of services that will be obtained during that year by the applicable company and its controlled subsidiaries and affiliates from the independent auditor (including its affiliates). The approved services generally are consistent with the descriptions below:
Category | | Description | Audit services | | Audit and review of annual and quarterly financial statements, expressing opinions on the conformity of the audited financial statements with generally accepted accounting principles, auditing management’s assessment of the effectiveness of internal control over financial reporting, and services that only the independent auditor reasonably can provide (e.g., comfort letters, statutory and regulatory audits, attest services, consents, assistance with and review of documents filed with the SEC, and assistance with new accounting standards, laws, and regulations). | Audit-related services | | Assurance and related services that traditionally are performed by the independent auditor (e.g., agreed-upon procedure reports related to contractual obligations and financing activities, consulting regarding accounting pronouncements, nuclear decommissioning trust audits, and attest services). | Tax services | | Advice relating to compliance, tax strategy, tax appeals, and specialized tax issues, all of which also must be permitted under the Sarbanes-Oxley Act. | Non-audit services | | None. |
The Audit Committees also approve maximum fee amounts for each type of approved service.
As part of the review process, the Audit Committees assess, among other things, the impact of that service on the independent auditor’s independence.
During 2018, management adopted a policy of retaining Deloitte & Touche, Deloitte Consulting, or their subsidiaries or affiliates (together, “Deloitte”) for non-audit services only if the services (1) do not impair Deloitte & Touche’s independence, in fact or appearance, and are permitted by any rules regarding auditor independence, and (2) when aggregated, total amounts paid per year by the companies to Deloitte for “tax service” and “other services” (non-audit services) will be no more than 20 percent of the expected amounts that the companies will pay to Deloitte for “audit services” and “audit-related services.”
Mid-Year Monitoring and Approval of Additional Services
During the year, management periodically updates each Audit Committee as to the extent to which the approved services have already been provided. The Audit Committees also must approve (1) any proposed new services that were not approved during the annual review and (2) any increase in authorized fee amounts for previously approved services.
Delegation of Pre-Approval Authority
Each Audit Committee has delegated to its Committee Chair, or to any other independent Committee member if the Chair is not available, the authority to pre-approve services provided by the applicable company’s independent auditor. These pre-approvals must be presented to the full Audit Committee at its next regularly scheduled Committee meeting.
Services Provided During 2020 and 2019
During 2020 and 2019, all services provided by Deloitte & Touche to PG&E Corporation, the Utility, and their consolidated affiliates were approved consistent with the applicable pre-approval procedures.
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REPORT OF THE AUDIT COMMITTEES
The Audit Committees of PG&E Corporation and Pacific Gas and Electric Company are made up of independent directors and operate under written charters adopted by their respective Boards. The members of the Audit Committees of PG&E Corporation and the Utility are identical. At both PG&E Corporation and the Utility, management is responsible for internal controls and the integrity of the financial reporting process.
The Committees reviewed and discussed the audited consolidated financial statements of PG&E Corporation and the Utility with management and the independent auditor. The Committees also discussed with the independent auditor the matters that are required to be discussed by applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the Securities and Exchange Commission.
Deloitte & Touche LLP was the independent auditor for PG&E Corporation and the Utility in 2020. Deloitte & Touche LLP provided to the Committees the written disclosures and letter required by applicable requirements of the PCAOB regarding an independent auditor’s communications with an audit committee concerning independence and non-audit services, and the Committees discussed with Deloitte & Touche LLP that firm’s independence.
Based on the Committees’ review and discussions described above, the Committees recommended to the respective Boards and their delegates that the audited consolidated financial statements for PG&E Corporation and the Utility be included in the PG&E Corporation and Pacific Gas and Electric Company Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission.
February 25, 2021
Audit Committees of the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company
Benjamin F. Wilson, Chair
Rajat Bahri
Kerry W. Cooper
Robert C. Flexon
2021 Joint Proxy Statement | 36 |
Our Pay
Item No. 3: Advisory Vote onto Approve Executive Compensation for PG&E Corporation and Pacific Gas and Electric Company
PG&E Corporation and the Utility each asks their respective shareholders to approve the following:
RESOLVED that the compensation paid for 2020 to the company’s executive officers named in the Summary Compensation Table of this Joint Proxy Statement, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables, and the accompanying narrative discussion, is hereby APPROVED.
Each of PG&E Corporation and the Utility believes that its executive compensation policies and practices for 2020 were effective in tying a significant portion of pay to performance, while providing competitive compensation to attract, retain, and motivate talented executives, and aligning the interests of our executive officers with those of our shareholders.
In establishing PG&E Corporation’s officer compensation programs for 2020 (which also cover officers of the Utility), the Compensation Committee established three objectives. These objectives, and how these objectives were met for 2020, are discussed in the CD&A, which can be found immediately following this Item No. 3. These objectives are summarized below.
A significant portion of every officer’s compensation should be tied directly to PG&E Corporation’s performance, without promoting excessive risk-taking. | | | | | | | | | | | | | Board Recommendation | | What are you voting on? PG&E Corporation and the Utility each asks its respective shareholders to approve, on an advisory basis, the compensation paid for 2022 to the company’s executive officers named in the Summary Compensation Table of this Joint Proxy Statement, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables, and the accompanying narrative discussion. | | Vote "FOR" | | | | | |
With the exception of base salary and perquisites, all elements of 2020 annual officer compensation were tied to corporate operational and/or financial performance and, therefore, provided a direct connection between compensation and performance in the achievement of both key operating results and long-term shareholder value. For William L. Smith, who served as the PG&E Corporation Interim CEO on December 31, 2020, approximately 86 percent of 2020 target compensation was tied to corporate performance. For the other NEOs, approximately 61 percent of average 2020 target compensation was tied to corporate performance.
The Compensation Committee’s independent general compensation consultant during 2020, Pay Governance LLC, advised that for 2020 there were no material issues regarding PG&E Corporation’s and the Utility’s executive compensation programs, and that the design of the companies’ incentive pay plans posed a low risk. As such, incentive plan design posed a low likelihood of incenting employees to engage in behaviors that are likely to have an adverse material impact on the companies.
A significant component of officer compensation should be tied to PG&E Corporation’s long-term performance for shareholders, in the form of long-term incentive awards. | | | | | | | | | | | | | | | Each of PG&E Corporation and the Utility believes that its executive compensation policies and practices for 2022 were effective in tying a significant portion of pay to performance, while providing competitive compensation to attract, retain, and motivate talented executives, and aligning the interests of our executive officers with those of our shareholders. At the Joint Annual Meeting in 2022, shareholders showed high levels of support for the 2021 officer compensation program. PG&E Corporation’s officer compensation programs for 2022 (which also cover officers of the Utility) generally are designed to meet four objectives. These objectives, and how they were met for 2022, are discussed in more detail the Compensation Discussion & Analysis (CD&A), which can be found immediately following this Proposal 2. These objectives are summarized here. | | | | | | | Summary of Objectives • A significant portion of every officer’s compensation should be tied directly to PG&E Corporation’s performance without promoting excessive risk-taking. All variable elements of 2022 annual compensation for our Named Executive Officers (NEOs) were tied to corporate operational and/or financial performance and, therefore, provided a direct connection between compensation and performance in the achievement of both key operating results and long-term shareholder value creation. For Patricia K. Poppe, the PG&E Corporation Chief Executive Officer (CEO), approximately 90 percent of 2022 target compensation was tied to corporate performance. For the other NEOs, approximately 74 percent of average 2022 target compensation was tied to corporate performance. The People and Compensation Committee’s independent compensation consultant during 2022, Meridian Compensation Partners, LLC (Meridian), assessed the pay programs and advised that for 2022 the design of the companies’ incentive pay plans does not encourage excessive risk-taking. As such, incentive plan design posed a low likelihood of incenting employees to engage in behaviors that are likely to have an adverse material impact on the companies. • A significant component of officer compensation should be tied to PG&E Corporation’s long-term performance for shareholders in the form of long-term incentive awards. Annual long-term incentive awards for 2022 to NEOs were made entirely in the form of performance share units (PSUs). Consistent with the 2021 framework, awards made in 2022 can be earned depending on performance related to metrics in the areas of customer operations (weighted at 30 percent), public safety (weighted at 40 percent) and financial stability, including a total shareholder return (TSR) metric relative to our 2022 Performance Comparator Group (weighted at 30 percent). PSUs granted in 2022 will vest, if at all, at the end of a three-year period, and their value is tied to the price of PG&E Corporation common stock. • Target direct compensation (base salary and target incentives) should be competitive with the compensation for comparable officers in the 2022 Pay Comparator Group. Target direct compensation for NEOs in 2022 was within competitive market range in the 2022 Pay Comparator Group. • Officer compensation program complies with legal requirements. The officer compensation structure is designed and reviewed to reflect both the letter and spirit of legal requirements. | | | | | | |
The annual long-term incentive awards for 2020 consisted of 50 percent performance shares using customer experience metrics and 50 percent performance shares using public safety metrics. Additionally, the 2020 awards include a financial stability modifier based on relative total shareholder return (TSR) and ranging from 75 percent to 125 percent, which will be applied to the final performance results for all metrics underlying performance shares. Performance shares granted in 2020 will vest, if at all, at the end of a three-year period, and their value is tied to the price of PG&E Corporation common stock. In addition, the value of the TSR modifier is tied to the relative three-year performance of PG&E Corporation common stock price appreciation and dividends paid, as compared to the TSR of companies in the 2020 Performance Comparator Group.
Target cash compensation (base salary and target short-term incentive) should be competitive with the median target cash compensation for comparable officers in the 2020 Pay Comparator Group.
Target cash compensation for NEOs in 2020 generally was within a range of 8 percent above to 6 percent below the corresponding market median for companies in the 2020 Pay Comparator Group.
This vote is non-binding and is required by Section 14A of the Securities Exchange Act of 1934. PG&E Corporation and the Utility each currently plan to submit this vote to shareholders annually, and expect to next submit this matter to shareholders in connection with next year’s annual shareholder meeting.meeting, pending consideration of results from each company's shareholder vote on Proposal 3 in this Proxy Statement. If the shareholders of either company do not approve this proposal, the People and Compensation Committee and members of management will investigateexamine the reasons for disapproval and will consider those reasons when developing future executive compensation programs, practices, and policies. The Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company Unanimously Recommend a Vote FOR This Proposal to Approve the Compensation of Each Company’s Executive Officers Named in the Summary Compensation Table, as Described in This Joint Proxy Statement.
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| | | | | | | | | | | | | COMPENSATION COMMITTEE REPORT The People and Compensation Committee of the PG&E Corporation Board of Directors has reviewed and discussed this Compensation Discussion and Analysis with management. Based on this review, the related discussions, and such other matters deemed relevant, the People and Compensation Committee has recommended to the Boards of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for the year ended December 31, 2022. Mark E. Ferguson III (Chair) Kerry W. Cooper Jessica L. Denecour Michael R. Niggli | | | | |
| | | | | | | 2023 Joint Proxy Statement | 41 |
Compensation Discussion and Analysis | | | | | | | | | | | | | | | | | | This CD&A provides our shareholders and other stakeholders with information about PG&E Corporation’s and the Utility's performance, compensation framework, compensation decisions, and associated governance for our NEOs in 2022. PG&E Corporation is a holding company whose primary operating subsidiary is the Utility, a public utility operating in northern and central California. The Utility generates revenues mainly through making investments in operating assets and earning an authorized rate of return on those assets through regulated rates for the sale and delivery of electricity and natural gas to customers. The compensation program described in this CD&A applies to PG&E Corporation and the Utility, with the same philosophy, structure, metrics, and goals applying to both. As of December 31, 2022, the companies had approximately 26,000 regular employees, eleven of whom were employees of PG&E Corporation. The following table summarizes our NEOs for 2022. Please note that as of December 31, 2022, three individuals concurrently served as principal executive officers (PEOs) of the Utility: Mr. Glickman, Ms. Santos, and Mr. Wright. | | | | | | | | 1. Executive Summary | 43 | | | | 2. Compensation Design | 44 | | | | 3. Compensation Governance | 48 | | | | 4. 2022 Compensation Decision and Outcomes | 52 | | | | 5. 2023 Compensation Structure | 60 | | | | 6. Additional Information | 60 | | | | | | | | | | | | | | | | |
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed this Compensation Discussion and Analysis with management. Based on this review, the related discussions, and such other matters deemed relevant, the Compensation Committee has recommended to the Boards of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for the year ended December 31, 2020.
Mark E. Ferguson III (Chair)
Jessica L. Denecour
Robert C. Flexon
Dara J. Treseder
2021 Joint Proxy Statement PG&E Corporation | 38 | | | | |
| (positions as of 12/31/22) | | | | | | Patricia K. Poppe | Christopher A. Foster | John R. Simon | | | | Chief Executive Officer | Executive Vice President and Chief Financial Officer (2) | Executive Vice President, General Counsel and Chief Ethics & Compliance Officer | | | | | | | |
Back to Contents | | | | | | | | | | | | | | | | | | | Pacific Gas and Electric Company | | | | | | | (positions as of 12/31/22) | | | | | | Jason M. Glickman | Marlene M. Santos (1) | Adam L. Wright (1)(3) | | | | Executive Vice President, Engineering, Planning & Strategy | Executive Vice President and Chief Customer Officer | Executive Vice President, Operations and Chief Operating Officer | | | | | | | | | | | | | | | | David S. Thomason | Sumeet Singh | Julius Cox | | | Vice President, Chief Financial Officer and Controller (4) | Executive Vice President, Chief Risk and Chief Safety Officer (5)(6) | Executive Vice President, People, Shared Services, and Supply Chain (6) |
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (CD&A) provides our shareholders and other stakeholders with information about PG&E Corporation’s and Pacific Gas and Electric Company’s performance, compensation framework, compensation decisions, and associated governance for our Named Executive Officers (NEOs) in 2020 at both PG&E Corporation and the Utility (together, the companies or PG&E).
1. Executive Summary | 40 | | | | | 2. Overview(1) | 40Also served as NEOs of PG&E Corporation during 2022. | 3. Compensation Design (2) | 44Mr. Foster is resigning effective May 4, 2023. | 4. Compensation Governance (3) | 48Mr. Wright resigned effective February 6, 2023. | 5. 2020 Compensation Decision and Outcomes (4) | 54Mr. Thomason resigned effective January 9, 2023. | 6. Long-Term Incentives (5) | 58Mr Singh was elected Executive Vice President, Operations, and Chief Operating Officer of Pacific Gas and Electric Company, effective March 1, 2023. In such position, Mr. Singh also serves as one of three PEOs of the Utility. | 7. 2021 Compensation Structure (6) | 64As of December 31, 2022, also held these positions at PG&E Corporation, although do not have NEO status at PG&E Corporation. | 8. Additional Information | 66 |
“Supporting Information” callout boxes are used within the CD&A to provide additional context where appropriate.context. |
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Executive Summary
• | 2020 was a year of transition for the companies. During the year, we emerged from bankruptcy, seated new Board members, and set the foundation for a new PG&E Corporation chief executive officer and a refreshed executive team. | | | • | Our leadership took strong and swift actions to mitigate the impacts of COVID-19• Continue industry leading alignment of compensation and performance. Equity awards for NEOs were 100 percent PSUs resulting in approximately 76 percent of NEO pay on average based on the business. Our priorities were to protect the safety and health of our workforce—particularly our mission-critical frontline workers, maintain the level of service that our customers expect, and promote the resilience of the business. There were no compensation program changes made due to the COVID-19 pandemic. | | | • | We delivered solid performance for shareholders. Our fiscal year 2020 non-GAAP Core Earnings per Share was $1.61, in line with guidance.2 | | | • | Our compensation program is focused on safety and operations. The design of our program is informed by the unique requirements that apply to our companies, including those stemming from our bankruptcy emergence and the commitments applicable under our Plan of Reorganization Order Instituting Investigation (POR OII) with the CPUC, and executive compensation criteria set out in California Assembly Bill 1054 (AB 1054). | | | • | The Compensation Committee exercised negative discretion to reduce short-term incentive payouts to 65 percent of target in respect of company performance. Operational performance and financial results combined to produce a formulaic result of 74.6 percent. In view of the companies’ overall safety performance and performance reports from the Federal Monitor, the Compensation Committee elected to exercise negative discretion to reduce short-term incentive payouts for our NEOs to 65 percent of target. | | | • | Performance-based long-term incentive awards granted in 2018 did not pay out. Operational performance and financial results combined to produce a formulaic result of 72 percent. The Compensation Committee exercised negative discretion to reduce any remaining performance share payouts for our NEOs to zero, aligning long-term compensation payouts with shareholder outcomes. The discretion applied to results of both short- and long-term incentives will result in a reduction of incentive compensation, in the form of 2020 short-term incentive payments and 2018 performance share payments, to officers for 2020 by an average of 58 percent from target for those elements of incentives. | | | • | The Compensation Committee continues to evolve our program. The Compensation Committee focused its work on redesigning performance metrics to focus on results. For the 2021 short-term incentive, we are capping payouts at 200 percent of target and removing the individual performance modifier. For our 2021 long-term awards, we have reintroduced restricted stock units for executives not subject to the executive compensation criteria of AB 1054 and reduced the maximum payout opportunity for performance share units to 200 percent. We also adjusted several short- and long-term metrics to increase the focus on operational, results-oriented outcomes and provide for better alignment with our commitments to stakeholders. |
Overview
Our Companies
PG&E Corporation is a holding company whose primary operating subsidiary is the Utility, a public utility operating in northernachievement of objective performance measures. Additionally, the individual performance modifier was reintroduced under the 2022 STIP providing the ability to adjust awards up or down based on individual performance.
• Continue emphasis of safety and central California. The Utility generates revenues mainly through making investments in operating assetsoperational performance Wildfire safety related metrics account for 40 percent of the weightings within both the short and earning an authorized rate of return on those assets through regulated rates forlong-term incentive plans. Key wildfire safety metrics include the saleWildfire Risk Reduction, CPUC Reportable Fire Ignitions, Quality Inspection Pass Rate, and System Hardening. Additionally, the incentive plans continue to emphasize the safe and efficient delivery of electricity and natural gas to customers.our hometowns. • Delivered on short-term and long-term performance objectives. The compensation program describedcertified 2022 short-term incentive plan was 116.8 percent of target and the 2020-2022 long-term incentive plan PSUs score was certified as 139.5 percent of target. These scores reflect the lowest number of reportable fire ignitions in the last four years, 100 percent on-time completion of five key wildfire mitigation plan commitments, and strong performance of other operational metrics such as the safe operation of DCPP. • Delivered strong financial performance. Non-GAAP core earnings(1) were $1.10 per share for the year, up 10 percent from last year. Additionally, Total Shareholder Return (TSR) was 48.4 percent, the highest of the performance group over the three-year performance period ending December 31,2022. (1) PG&E Corporation discloses historical financial results and bases guidance on “Non-GAAP core earnings” in order to provide a measure that allows investors to compare the underlying financial performance of the business from one period to another, exclusive of non-core items. Non-GAAP core earnings are not a substitute or alternative for income available for common shareholders presented in accordance with Generally Accepted Accounting Principles (GAAP) (see Exhibit A at the end of this CD&A appliesfor a reconciliation of results based on earnings from operations to PG&E Corporation and the Utility,results based on income available for common shareholders in accordance with the same philosophy, structure, metrics, and goals applying to both.As of December 31, 2020, the companies had approximately 24,000 regular employees, nine of whom were employees of PG&E Corporation.
2 | PG&E Corporation discloses historical financial results and bases guidance on “earnings from operations” in order to provide a measure that allows investors to compare the underlying financial performance of the business from one period to another, exclusive of items that management believes do not reflect the normal course of operations. Earnings from operations are not a substitute or alternative for income available for common shareholders presented in accordance with Generally Accepted Accounting Principles (GAAP) (see Exhibit A at the end of this CD&A for a reconciliation of results based on earnings from operations to results based on income available for common shareholders in accordance with GAAP). |
2021 Joint Proxy Statement | 40 |
Our Named Executive Officers
PG&E Corporation (positions as of 12/31/2020) | | | William L. Smith | Christopher A. Foster | John R. Simon | William D. Johnson | Interim Chief Executive
Officer and President(1) | Vice President and Interim
Chief Financial Officer(2) | Executive Vice President,
General Counsel and
Chief Ethics & Compliance
Officer(3) | Former Chief Executive
Officer and President(4) | Jason P. Wells | Janet C. Loduca | | | Former Executive Vice
President and Chief
Financial Officer(5) | Former Senior Vice President
and General Counsel, PG&E
Corporation and Pacific Gas
and Electric Company(6) | | | | | | | Pacific Gas and Electric Company (positions as of 12/31/2020) | | Michael A. Lewis | David S. Thomason | James M. Welsch | Andrew M. Vesey | Interim President(7) | Vice President, Chief
Financial Officer and
Controller | Senior Vice President,
Generation and Chief
Nuclear Officer | Former Chief Executive
Officer and President(8) |
| Ms. Loduca was an NEO of the Utility in addition to PG&E Corporation. Messrs. Lewis and Vesey were NEOs of PG&E Corporation in addition to the Utility. | | | | Notes. | (1) | Effective June 30, 2020. | | | | | (2) | Effective September 26, 2020. From January 1 through March 8, 2020, Mr. Foster was Vice President, Investor Relations. From March 9 through September 25, 2020, Mr. Foster was Vice President, Treasury & Investor Relations. | | | | | (3) | Title effective August 15, 2020. From January 1 through August 14, 2020, Mr. Simon was Executive Vice President, Law, Strategy & Policy. | | | | | (4) | Retired effective July 1, 2020. | | | | | (5) | Resigned effective September 26, 2020. | | | | | (6) | Separated effective August 16, 2020. | | | | | (7) | Effective August 1, 2020. From January 1 through July 31, 2020 Mr. Lewis was Senior Vice President, Electric Operations. | | | | | (8) | Separated effective August 4, 2020. |
Leadership Changes
The companies experienced several significant leadership transitions during 2020. Mr. Johnson retired as CEO and President of PG&E Corporation effective July 1 and the PG&E Corporation Board appointed Mr. Smith on an interim basis from June 30 until the start date of a new CEO. Additionally, Mr. Vesey, Ms. Loduca, and Mr. Wells all left employment with the companies during the year.
In association with these changes the Compensation Committee reviewed and approved interim compensation arrangements and retention awards for select NEOs. Further details can be found in the “Interim CEO Compensation,” 2020 Compensation Decisions and Outcomes” and “Retention Awards” sections, starting on page 61, 54 and 60 respectively.
In November 2020, Patricia K. Poppe was hired as the new CEO of PG&E Corporation, effective January 4, 2021.
Our Response to COVID-19
The COVID-19 pandemic added operational challenges for the companies in 2020. As providers of an essential service we are committed to maintaining business continuity and services for the benefit of the communities in which we operate. Leadership acted quickly to protect the safety and health of our dedicated workforce, particularly our mission-critical frontline workers, implementing policies such as remote working where possible, the provision of PPE for our field workers, enhanced healthcare benefits, and interim time off and leave policies, all to maintain the level of service that our customers expect.
2021 Joint Proxy Statement | 41 |
Performance Highlights The 20202022 performance year was one of transition for the companies.about mitigating operational and financial risk. In addition to our exit from bankruptcy, executive team changes, renewed focus on safety, and focus on reliability and reducing operational risk, we also recommitted to the citizens of California that we would lead from the front on issues of climate change, wildfire mitigation, and environmental sustainability.The companies took responsibility for a series of devastating wildfires caused by our electric equipment, including the 2018 Camp fire. The Utility pleaded guilty to involuntary manslaughter in the deaths of the 84 people who lost their lives in that tragedy and settled billions of dollars in damage claims by fire victims as well as cities, counties, and other public entities.
In August, California experienced some of the most severe weather in recent history, including extreme heat, dangerously high winds, and a “lightning siege” that ignited wildfires across the Utility’s service territory. These events strained the capacity of the state’s electric grid, forcing the independent system operator to impose “rolling backouts” affecting hundreds of thousands of PG&E customers. Dangerous weather conditions recurred throughout the summer, fall, and into the winter, necessitating several PSPS events, many of which affected the same communities multiple times.
Within our challenging operating environment,delivering strong financial performance, the companies succeeded in mitigating more than ninety percent of wildfire risk
2 and achieving many of the performance objectives set for 2020:• | We laid the groundwork for further improvements in the wildfire management program in 2021. We committed to ensuring that our PSPS events would be targeted and focused, and demonstrated clear year-over-year improvements that received positive feedback from the CPUC. | | | • | We exited bankruptcy, expedited the resolution of wildfire victims’ claims, and successfully closed major regulatory cases at both the state and federal level. | | | • | We seated a diverse, deeply experienced Board at each company, and began recruiting new members for the companies’ executive teams, naming Patricia K. Poppe as the incoming CEO of PG&E Corporation in November. |
However,2022:
•The CPUC authorized the companies’ 2020 performanceUtility’s exit from Step 1 of the Enhanced Enforcement Oversight Process on December 1, 2022. Under our 2022 WMP, we continued to focus our wildfire mitigation work on improvements in system hardening, vegetation management, system inspections and monitoring and modeling capabilities, but our work is not done until catastrophic wildfires stop. •The EPSS program allows for automatic shutdown of electric lines within 1/10 of a second if the electric system senses a problem. In 2022, EPSS capability was expanded to all HFRA as well as select adjacent areas. Through December 31, 2022, there was a greater than 36 percent reduction in CPUC reportable ignitions in HFTD areas compared to the 2018-2020 three-year average. This is primarily driven by a more than 65 percent reduction in CPUC reportable ignitions on EPSS enabled lines in HFTD areas (compared to weather normalized 2018-2020 average ignitions). Along with the significant reduction of overall ignition count, we have also fell shortobserved a dramatic decrease in several key areas:• | We experienced five employee and contractor fatalities, including a helicopter crash that claimed three lives. | | | • | Both the safety shutoffs and the state-mandated rolling blackouts contributed to frequent and extended service interruptions. | | | • | Our gas operations recorded several large overpressure incidents that, while managed safely, did not reflect our standards or expectations. | | | • | The year’s extreme weather contributed to a number of fire ignitions connected to PG&E equipment. | | | • | Throughout 2020, and continuing into 2021, the Utility continued to face questions and criticism from the federal judge overseeing its probation. The judge expressed his view that the Utility was not complying with conditions linked to the vegetation management and safety metrics detailed in the Utility’s Wildfire Mitigation Plan. With the concurrence of the US Attorney’s Office and the CPUC, these concerns were resolved when the Utility agreed to new conditions of probation ultimately approved by the court. |
2021 Joint Proxy Statement | 42 |
total HFTD acres burned. In 2022, we observed a 99 percent decrease in total HFTD acres burned relative to the 2018-2020 average. A primary driver for this is understood to be the reduced fault energy that occurs when EPSS protection is enabled. •In 2022, no customers were de-energized as part of the PSPS program. •While the companies saw significant progress in 2022, we unfortunately experienced three fatalities with our workforce. Also, Utility assets are being investigated in connection with a 2022 wildfire greater than 100 acres in a high fire threat area. Our core compensation program, which consists of base salary, a cash-based short-term incentive, and an equity-based long-term incentive,incentives, is applied consistently to both PG&E Corporation and the Utility. This compensation framework applied to all NEOs during the year other than the former CEO and President of PG&E Corporation, who was subject to a three-year agreement based on the prevailing bankruptcy conditions in 2019, and the Interim CEO and President of PG&E Corporation, whose pay arrangements reflected the transitionary nature of the role.year.
| | | | | | | | | | | | | | | | | | | | 2Based on a comparison in the Utility's General Rate Case testimony of the wildfire risk score for a baseline risk level to a risk level reflecting the Utility’s mitigation work. Risk scores are calculated using the scoring methodology established by the CPUC in the Safety Model Assessment Proceeding, which reflects the frequency with which various risks are expected to occur and the potential safety, reliability, and financial impacts of varying degrees of wildfire severity. |
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| | | | | | | | | | | | | | | Core Pay Component and Rationale(1) | 20202022 NEO Target Direct
Compensation Mix(1)(2) | 20202022 Performance Measures | Performance
Period | Form of
Payment | Base Salary
Fixed pay to attract and retain talent;takes account of scope, performance and experience |  | •N/A | N/A | Cash | Short-Term Incentive
Incentives
Variable pay to incent and recognize performance in areas of short-term strategic importance |  | • Electric Operations Safety
• Gas Operations Customer
• Generation Financial
• Additional Public Safety & Reliability •Financial Stability
Individual Performance Modifier
Specific metrics associated witheach category; see below
| One year | Cash | Long-Term Incentives
Equity-based pay to incent andrecognize performance in areas of long-term strategic importance, promote retention and stability, and align executives with shareholders |  | • Safety
• Customer Satisfaction Score
• PSPS Notification Accuracy
• System Hardening
• Substation Enablement
Relative TSR Modifier
Financial
Specific metrics associated with each category; see below | Three years | PSUs |
| (1) In addition to these core direct components of compensation, NEOs receive modest perquisites, are eligible to participate in post-employment benefit programs on terms broadly similar to our other employees, and are covered by an executive severance plan. | | | | Notes. | (1) | Reflects target compensation for our NEOs who remained in employment on December 31, 2020, other than Mr. Smith given his unique and temporary compensation arrangements as Interim CEO and President. |
From time to time, the Compensation Committee might also approve cash or equity awards in addition to the annual incentive awards. Typically, these include awards to new hires, promotional awards, or retention awards. One-time awards were made during 2020 to address retention concerns and reflected the fact that certain individuals took on expanded roles following NEO departures. Further details on the operation of all elementscore direct components of compensation, during 2022 NEOs received modest perquisites, were eligible to participate in 2020, including awards relatedpost-employment benefit programs on terms broadly similar to expanded dutiesour other employees, and retention, can be found in the “2020 Compensation Decisions and Outcomes” section starting on page 54.
Looking Ahead
2021were covered by an executive severance plan.
(2) Reflects average target compensation for all of our NEOs as of December 31, 2022. The core compensation framework for 2022 is expected to be a year of significant change and rebuilding for the companies, with Ms. Poppe’s appointment as CEO of PG&E Corporation and a new executive leadership team leading the companies in a post-bankruptcy environment. On joining PG&E Corporation, Ms. Poppe immediately began meeting with customers, policymakers, investors, and co-workers across the companies to gather insights on how to improve outcomes, reduce risk, and rebuild trust. Her approach centers on results that deliver benefits across the “Triple Bottom Line” of People, Planet, and Prosperity, underpinned by our safety mindset and supported by consistent operational performance.For 2021, the Compensation Committee has maintained a compensation structure broadly consistent with 2020,2021, with the following updates:
•NEO equity grants were made entirely in the form of PSUs, rather than a combination of PSUs and RSUs. •Minor changes were made to performance metrics and their associated weightings to, reflect priorities foramong other things, increase the year ahead with an emphasis on results. These changes reinforce important areas of operational focus, including increased emphasis on safety while maintaining alignment with the criteria of AB 1054performance and our commitmentsrefine definitions. •The individual performance modifier was reintroduced under the POR OII.2021 Joint Proxy Statement | 43 |
2022 STIP, providing the ability to adjust awards up or down by 20 percent based on individual performance, with earned awards subject to the same payout at 50 percent of target for threshold performance and overall cap of 200 percent of target. As the Boards and refreshed executive team continue to refine our long-term strategic objectives, the Compensation Committee will work to help ensure that our compensation philosophy and practices appropriately focus on operational, financial, safety, and customer-centered priorities that represent the stakeholders we serve. During 2021, we plan to re-engage with investors, proxy advisors, regulators, and other constituencies to gather feedback on our executive compensation programs. We will also conduct a comprehensive review of our compensation philosophy, programs, and practices to help ensure strong alignment with the interests of our shareholders, customers, and stakeholders, and competitive pay-for-performance positioning. Further information about our 2021 compensation design can be found in the “2021 Compensation Structure” section starting on page 64.
Compensation Design
Compensation Objectives Our companies’ missionprimary purpose is to deliver safe, reliable, affordable, and clean electricity and gas to our customers. Our focus on customer welfare, prioritizing both public and employee safety, is central to how we operate and reflected in our executive officer compensation program design. We believe that focusing on those attributes of our business will lead to long-term value creation for our shareholders. This focus also aligns with the criteria under AB 1054 and our commitments under the POR OII. To be successful, we need to attract, motivate, and retain executives with the necessary skills and experience, who are aligned with our vision and who can deliver on our commitments to all stakeholders. Four fundamental objectives form the foundation of our compensation program. Objective | | | | | | | | | | | | | | | | Objective | | | How we achieve this1 | | Pay for performance | • | • | A significant portion of total compensation is at-risk and based on performance – performance—in 20202022, approximately 90 percent of CEO target compensation was at-risk (and an average of 6174 percent of NEO target compensation was at-riskfor other NEOs). | | • | • | Short- and long-term incentives are earned based on performance reflecting safety, customer, operational, and financial goals, including shareholder returnsreturns. | | • | • | Metrics and goals are designed so as not to promote excessive risk-takingrisk-taking. | | Align with shareholders | | • | Equity-based compensation, the value of which reflects movements in our stock price, accounted for more than 75 percent of CEO target compensation and an average of 4756 percent of NEOother NEOs’ target compensation in 20202022. | | • | • | Total shareholder return relative to our Performance Comparator Group is used as a performance measure or modifier (applies to 2018 and 2020 PSU awards; no awards were made in 2019)modifier. |
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| | | | | | | | | | | | | | | | Objective | | | How we achieve this | | Provide market competitive pay | • | • | Target cashdirect compensation should be competitive with the median for comparable roles in our Pay Comparator GroupGroup. | | • | Provide a compensation structure that provides for the attraction and retention of talented, experienced executive talent, while ensuring alignment with long-term shareholder interest. | | Comply with legal requirements | • | • | The officer compensation structure is designed and reviewed to reflect both the letter and spirit of legal requirements | | | |
Notes. | (1) | Reflects target compensation for our NEOs who remained in employment on December 31, 2020, other than Mr. Smith given his unique and temporary compensation arrangements as Interim CEO and President. |
2021 Joint Proxy Statement | 44 |
Compensation Policies and Practices We are focused on creating an effective compensation program that successfully aligns our key strategic objectives with the interests of our shareholders and broader stakeholders. To reinforce this, we have adopted policies and practices that guide our compensation practices as summarized below. | | | | | | | | | | | | | We Do… | | We Do Not… |  | Pay for performance | Majority of compensation is at risk, linked to company performance and shareholder interests. |  | Pay tax gross-ups | No tax gross-ups are provided, except for those generally available to all management employees, such as for one-time relocation expenses upon hirehire. |  | Engage with shareholdersstakeholders | Ongoing discussionswith key institutional investors and regulators, including on thetopic of compensation(1). |  | Permit hedging or pledging | Our policy prohibits hedging and pledging of either company’s stockstock. | | Require meaningful ownership | Executives subject to share ownership and retention requirementsrequirements. | | Reprice stock options | Any repricing would require advance shareholder approvalapproval. | | Engage an independent consultant | The People andCompensation Committee engages a consultant and annually assesses independence. | | Provide additional executive service credits | No granting of additional service under the Supplemental Executive Retirement Plan. | | Operate clawback provisions | Incentive compensation and severance for certain officers is subject to clawback or restrictionrestriction. | | Pay unearned dividends | No dividends or dividend equivalents are paid on unvested equity awardsawards. | | Have a double trigger | Change in control severance requires a change in control and involuntary termination (includes constructive termination for good reason). | | Provide excessive benefits or perquisites | Benefits and perquisites are limited, reflecting market normsnorms. |
Notes. | (1) | Engagement related to executive compensation was temporarily suspended during bankruptcy proceedings and will recommence in 2021. |
The Utility is subject to AB 1054, a California law which, among other things, sets out certain criteria regarding the design of the Utility’s executive compensation program. Although these criteria only apply to the Utility’s executive officers as defined in AB 1054, the criteria have also have influenced the executive compensation design and arrangements for officers at both companies. There are also additional executive compensation requirements that the Utility is subject to as a result of the POR OII. | | | | Supporting Information: California Assembly Bill 1054 Considerations |
AB 1054 is legislation applying to the Utility that addresses the dangers and devastation from catastrophic wildfires in California caused by electric utility infrastructure. There are two subsections setting forth criteria regarding executive compensation with which the Utility complies. These criteria apply specifically to a subset of Utility officers and influence the design of our programs more broadly at both the Utility and PG&E Corporation. We have designed our programs to comply with these requirements, as described below. | | | Supporting Information: Chapter 11 Considerations -— Plan of Reorganization Order Instituting Investigation |
The POR OII is the process by which the CPUC reviewed and approved the companies’ Chapter 11 Plan of Reorganization. As part of the POR OII, the Utility is subject to additional requirements regarding executive compensation that apply specifically to a subset of Utility officers, and we have designed our programs to comply with these requirements, as described below. 2021 Joint Proxy Statement | 45 |
Requirement(1) | | How We Achieve This(2,3)(2) | Compensation should be structured to promote safety as a priority and to ensure public safetysafety. | | Incentive plan metrics are weighted toward customer and workforce welfare, placing a priority on public safetysafety. | | All long-term incentive awards also incent customer and workforcepublic welfare directly through customer and safety focused performance metrics and indirectly due to their exposure to absolute and relative stock performanceperformance. |
| | | | | | | 2023 Joint Proxy Statement | 45 |
| | | | | | | | | A significant portion of long-term incentive compensation shall be based on safety, customer satisfaction, engagement, and welfare; the remaining portion may be based on financial performance or other considerationsconsiderations. | | PSU metrics promote customer experience and public safety safety. | Compensation should be structured to promote utility financial stabilitystability. | | Incentive plan metrics collectively promote customer, public, and workforce safety, thus contributing indirectly to financial stabilitystability. | | Short-term incentive includes a core earnings per share metric, a measure sensitive to dilution incurred during emergence from Chapter 1111. | | Long-term incentive awards are subject to a financial or relative TSR metric, either as a modifier or standalone measure, that reduces payouts if our relative returns lag those of other energy companiescompanies. |
| | | | | | | | | Incentive compensation should be based on meeting performance metrics that are measurable and enforceableenforceable. | | Incentive plan metrics are designed to be objective, measurable, enforceable, and auditableauditable. | | Metrics are predominantly outcome-based, focused on end results rather than operational activity or efforteffort. | Guaranteed cash compensation should be limited, with the primary portion of executive officers’ compensation based on the achievement of objective performance metricsmetrics.
| | Compensation structure emphasizes at-risk, performance-based variable pay, making up an average of 6176 percent of NEO target compensation in 20202022. | | Short- and long-term incentives constitute at least 50 percent of target compensation; as noted above, in 2020, on average 61 percent of NEO target pay was at-risk variable pay | | Long-term incentive awards are aligned with shareholders and are performance-based through share price exposure (all equity-based compensation) and the application of performance metrics (PSUs). | The compensation structure must not include any guaranteed monetary incentivesincentives. | | Short- and long-term incentives are entirely at risk through the application of performance measures and/or share price exposure. | | The only guaranteed cash payments arepayment is base salary and a modest stipend in lieu of broader, market-typical perquisitessalary. | The compensation should include a significant long-term element based on the electrical corporation’s long-term performance and value, held or deferred for at least three yearsyears. | | Long-term incentive awards represent a significant portion of total compensationcompensation. | | Performance-based equity is subject to a three-year performance periodperiod. | | Performance-based equity is subject to a three-year hold from the date of grant | Ancillary compensation that is not aligned with shareholder and taxpayer interests in the electrical corporation should be minimal or eliminatedeliminated. | | ExecutivesEffective January 1, 2022, executive officers are no longer eligible to receive modestperquisites or stipends in lieu of perquisitesperquisites. |
| | | | | | | | | | These are de minimis in value and aligned with stakeholder interests as they are aligned with market norms within the industry, and thus contribute to the attraction and retention of talent |
Notes.(1) | (1) | This is an abbreviated summary of some of the criteria and not intended to be comprehensive or contain formal legal definitions. | | (2) | | | (2) | Unless noted otherwise, comments pertainComments in this column with regard to compensation arrangements post-Chapter 11 emergence, given the restrictions placed on practices during Chapter 11. | | | | | (3) | Unless otherwise noted, target compensation refersrefer to the aggregate of salary, target short-term incentive, and the target annual long-term incentive award, with percentages reflecting target compensationthe proportionate mix of these elements for our NEOs who remained in employment after December 31, 2020, other than Mr. Smith given his unique and temporary compensation arrangements as Interim CEO and President. |
2021 Joint Proxy Statement | 46 |
Strategic Alignment It is important that the performance metrics used in our officer compensation framework align with our strategic priorities if we are to be effective in paying for performance and demonstrating accountability. Our performance metrics reflect our focus on customer welfare, prioritizing both public and employee safety, including contributing to long-term sustainable value for our shareholders. The majority of both our short- and long-term incentive plan metrics are connected to our focus on customer welfare, prioritizing public and employee safety. These metrics are described below. Additional details regarding each of the listed performance measures can be found in the discussions of “Short-Term Incentives” and “Long-Term Incentives” below.
2020 | | | | | | | 2023 Joint Proxy Statement | 46 |
| | | Supporting Information: What “Financial Stability”Performance” Means for Us | | Our business model generates revenue through making investments in operating assets and earning an authorized rate of return on those assets through regulated rates, or “cost of service ratemaking.” There is no guarantee that regulated rates will yield the authorized rate of return; only by managing costs within the framework of authorized rates can we deliver value to shareholders. With limited exceptions, we do not make more money by selling more electricity and gas. Reducing our operating cost, which is tied to customer affordability through our rate-setting process, is directly aligned with creating shareholder value. |
2020 Performance Metric | | | | | | FINANCIAL STABILITY2023 Joint Proxy Statement | 47 |
| Short-Term | | Long-Term | | | | | | | | | | 2022 Performance Metric | | FINANCIAL | Short-Term | Long-Term | Why This Matters | | Non-GAAP core earnings per share | |  | | | | Measure to promote and assess financial stability; aligns with cost efficiency; promotes customer affordability; financial stability critical to continued provision of services to customerscustomers. | | Greater affordability for customers | | | Measure of earnings relative to amounts authorized by our regulators; assesses the efficient deployment of authorized revenues. | | Relative TSR | | | |  | | Measure to assess relative value created for our shareholders, providing an indirect external assessment of our performance in all other areas. In 2020 relative TSR was used as a modifier rather than a metric |
Compensation Governance
In 2022, the STIP also includes an individual performance modifier which enables greater individual accountability for contributions to our success in delivering results in the areas described above. Role of the People and Compensation Committee The People and Compensation Committee is made up of at least three, and currently four, independent directors who collectively have the delegated authority to oversee matters relating to defined compensation, benefits, and human capital issues. In discharging their duties, the People and Compensation Committee receives input from the management teams and external independent consultants as appropriate. 
| | | | | | | | | | | | | | | | Management | | People and Compensation Committee | | Boards | | Present proposals to the Committee on aspects of compensation and incentive plan design. | | Oversee the companies’ compensation programs and makes recommendations to the Boards. | | Review and approve the Committee’s recommendations related to PG&E Corporation CEO and Utility President (or equivalent officer) pay, and other matters brought to the Boards. | | | | | | | | Independent Consultants and Advisors | | | | | Provide independent advice to the Committee, including the provision of market data, guidance on incentive plan design and legal/regulatory updates | | |
The core activities of the People and Compensation Committee include: • Recommending the total target compensation for the CEO of PG&E Corporation and the Utility President (or equivalent officer(s)) to the relevant Board for approval, informed by reviews of comparative data, advice from the People and Compensation Committee’s independent compensation consultants, and an assessment of individual performance, objectives, and scope of responsibilities. • Approving the total target compensation for other senior officers (including all NEOs) based on similar contextual inputs and proposals from the PG&E Corporation CEO and the Utility President (or equivalent officer(s)), as applicable. The PG&E Corporation CEO has the authority to approve compensation within the guidelines approved by the People and Compensation Committee for lower-level officers (excluding Section 16 Officers) and non-officer employees. • Approving compensation guidelines based on input from management for different categories of employees, including target short- and long-term incentive opportunities, an aggregate cap on the value of long-term incentive awards, and the terms and conditions that will apply to long-term incentive awards made during the year. • Administering the LTIP, under which equity-based awards are made, with the ability to delegate ministerial matters to management. • Reviewing and approving the performance metrics and associated goals for the short- and long-term incentive awards proposed by management.
2021 | | | | | | | 2023 Joint Proxy Statement | 48 |
• | Approving the total target compensation for all other executive officers based on similar contextual inputs and proposals from the PG&E Corporation CEO and the Utility President (or equivalent officer(s)), as applicable. The PG&E Corporation CEO has the authority to approve compensation within the guidelines approved by the Compensation Committee for lower-level officers (excluding Section 16 Officers) and non-officer employees. | | | • | Approving compensation guidelines based on input from management for different categories of employees, including target short- and long-term incentive opportunities, an aggregate cap on the value of long-term incentive awards, and the terms and conditions that will apply to long-term incentive awards made during the year. | | | • | Administering the Long-Term Incentive Plan (LTIP), under which equity-based awards are made, with the ability to delegate ministerial matters to management. | | | • | Reviewing and approving the performance metrics and associated goals proposed by management, for the short- and long-term incentive awards. |
Role of Management The PG&E Corporation CEO and the Utility President (or equivalent officer(s)) are generally invited to People and Compensation Committee meetings but do not participate in discussions on their own compensation. In certain areas, as described above, the People and Compensation Committee welcomes these officers’ feedback on NEO performance given their knowledge of executives’ contributions, and gives this feedback appropriate consideration in the executive compensation-setting process. The People and Compensation Committee may exercise its discretion to accept, reject, or modify their feedbackthe officers' recommendations based on the People and Compensation Committee members’ collective assessment of the NEOs’ performance and pay position relative to the peer groups, and PG &E Corporation’s&E’s overall financial and operating performance and other factors that the People and Compensation Committee deems appropriate. Use of Consultants and Advisors To assist in discharging its duties, the People and Compensation Committee retains ana nationally recognized independent compensation consultant to provide advice and data, including advising and reviewing annual executive compensation arrangements and individual compensation packages. From September 2014 throughIn addition to being of value to the end of 2020,People and Compensation Committee, retaining a nationally recognized independent consultant is also a commitment under POR OII. Throughout 2022, the People and Compensation Committee retained Pay Governance, LLCMeridian as an independent consultant to provide advice on general compensation issues. During this period, Pay GovernanceMeridian did not provide services to management of either company or their respective affiliates although Pay GovernanceMeridian was invited to maintain a working relationship with management in order to effectively fulfill an advisor role to the People and Compensation Committee. During and in respect of 2020, Pay Governance2022, Meridian advised the People and Compensation Committee on the following matters: • | • Non-employee director compensation | • | Market competitiveness of executive officer compensation | • | Emerging trends and best practices in executive pay and corporate governance | • | Performance goal and metric selection | • | Compensation risk | • | Shareholder advisory firms’ pay and performance analyses | • | Disclosures relating to compensation | • | Severance and change-in-control practices and policies | • | Chapter 11 compensation-related matters |
In addition, for 2020, the companies engaged Willis Towers Watson for the specific purpose of advising the Boards of Directors, the Compensation Committee and management on incentive plans, retention plans, and non-employee director compensation for companies undergoing financial restructurings. Fees
• Market competitiveness of executive officer compensation • Emerging trends and best practices in respect of this work totaled $198,000 in 2020. Willis Towers Watson also provides actuarialexecutive pay and consulting services with respectcorporate governance • Performance goal and metric selection • Compensation risk • Shareholder advisory firms’ pay and performance analyses • Disclosures relating to employee compensation • Severance and benefit plan administration, with fees totaling $2.35 million in 2020. change-in-control practices and policies The Willis Towers Watson representatives who worked on the executivePeople and director compensation issues have no relationships with the Boards’ members or executive management, other than through the provision of this advice, and are independent of the team working on ongoing customary services for the companies. Compensation received by the Willis Towers Watson executive compensation team is not tied to the other fees paid to Willis Towers Watson by PG&E Corporation and the Utility.The Compensation Committee determined that no conflicts of interest were raised by the work of Pay Governance or Willis Towers WatsonMeridian during 2020.
2021 Joint Proxy Statement | 49 |
In the fourth quarter of 2020 the Compensation Committee conducted a review of executive compensation advisory firms. This reflected the healthy governance practice of conducting a periodic review,2022. The People and providing an opportunity to consider the merits of engaging the perspective of a new independent consultant. After careful consideration of a number of well-qualified nationally-recognized independent executive compensation consultants, Meridian Compensation Partners, LLC was selected to advise the Compensation Committee as of January 1, 2021. The Compensation Committee assessed Meridian’s independence and determined that no conflict of interests exist.
The Compensation Committee may also engage other compensation consultants, legal counsel, and advisers, after consideration of their independence and the potential for conflicts of interest. PG&E Corporation pays the reasonable compensation costs for any such advisers and consultants. Management may also retain separate compensation consultants.
Feedback from shareholders is an important consideration for the People and Compensation Committee when reviewing and setting compensation for our executive officers. In a typical year, this feedback is collected through two primary channels: • | • Directly through proactive engagement with our major shareholders and stakeholders throughout the year, and • Indirectly through the results of our say-on pay vote. At our 2022 Joint Annual Meeting, support for our 2021 executive compensation program was evidenced through votes in favor of each company’s say-on-pay proposal from over 97 percent of votes cast on each proposal.
| | | | | | •2023 Joint Proxy Statement | Indirectly through the results of our say-on pay vote.49 |
In 2020
The People and Compensation Committee regularly reviews executive compensation, taking into consideration input received through PG&E’s regular and ongoing engagement with investors, as well as indirect feedback from proxy advisor voting recommendations and investor voting guidelines. This feedback is then considered alongside the applicable regulatory requirements and our commitment to reach balanced and informed decisions. During our engagement for the year, prior to the 2023 Annual Meetings, we reached out to our large institutional shareholders, resulting in direct engagement with shareholders specific torepresenting more than 35 percent of the total outstanding shares of PG&E Corporation’s common stock. When executive compensation was limited priorraised, shareholders communicated that they did not have any concerns with our programs and did not believe any changes to our emergenceframework are necessary at this time. In addition to reviewing feedback from bankruptcy.
2021 Joint Proxy Statement | 50 |
direct engagement, the People and Compensation Committee also considers the results of the annual say-on-pay vote. At our 2022 shareholder meeting, approximately 97 percent of votes cast on each company's say-on-pay proposal were in support of our executive compensation program, which reinforced that our investors more broadly remain supportive of PG&E’s executive compensation program and design for the companies. Compensation and Risk The People and Compensation Committee annually reviews an assessment of the general risk factors associated with the companies’ compensation policies and practices to determine whether they encourage inappropriate risk-taking. The People and Compensation Committee’s independent compensation consultant in 2020, Pay Governance,2022, Meridian, assisted in this review. The People and Compensation Committee also receives advice from the Safety and Nuclear Oversight Committees of the companies’ respective Boards of Directors. | | | | | | | | | | | | | | | | Annual Risk Assessment | | Safety and Nuclear Oversight
Committees’ Input | | Compensation Risk Mitigation
Policies and Practices | | | | | | Annual risk assessment conducted by Pay GovernanceMeridian covered: • Compensation structure and mix • Incentive plan structures and associated time horizons • Governance of plan design and administration oversight • Target and maximum opportunities • Nature and mix of performance metrics • Risk of earnings manipulation • People and Compensation Committee/Board discretion to reduce or eliminate performance • Change in control severance provisions • Use of risk-mitigation policies and practices (see final column) • Regulatory compliance | | • Advice regarding appropriate safety and operational incentive measures • Assessment of emphasis on and overlap/consistency in safety metrics and weightings, and the extent to which these metrics and weightings support an organization-wide focus on safety
| | • Executive stock ownership guidelines • Hedging and pledging policy • Severance and change-in-control benefits • Incentive goal-setting approach
| | | | Pay GovernanceFor 2022, Meridian concluded that the companies’ compensation warrangements have a low-risk profile.arrangements do not encourage excessive risk taking (which also applies to PG&E's CEO and the PEO of the Utility). The companies believe compensation programs and policies are not reasonably likely to have a material adverse effect on either PG&E Corporation or the Utility. |
For 2020, Pay Governance concluded that there were no material issues regarding the companies’ executive pay programs, and that the design of the companies’ incentive pay plans has a low risk of encouraging employees to take risks that could potentially have material adverse consequences to the organization. The Pay Governance conclusion extends to the CEOs and Presidents (and equivalent officers) of PG&E Corporation and the Utility and the other NEOs who participated in the incentive arrangements during 2020. Based on this, the companies concluded that the risks arising from the overall compensation policies and practices are not reasonably likely to have a material adverse effect on either PG&E Corporation or the Utility.
Executive Stock Ownership Guidelines We believe that stock ownership further aligns the interests of our executives with those of our shareholders, encouraging executives to consider the long-term performance and prospects for our companies. Our guidelines require senior executive officers to achieve and maintain a minimum investment in PG&E Corporation common stock, expressed as a percentage of their base salary. In assessing compliance with the ownership target, beneficially owned stock, phantom stock units credited to the Supplemental Retirement Savings Plan, stock held in the stock fund of any defined contribution plan sponsored by either Company or its subsidiaries, and unvested RSUs are counted. A senior officer has five years to meet the ownership target for his or her position. Until an executivea senior officer meets the applicable guideline,ownership target, the executiveofficer is subject to a 50100 percent holding requirement in relation to the net shares realized after tax withholding from the vesting of RSUs or PSUs. In assessing compliance, unvested RSUs are counted if the executive is eligible for retirement under the award’s terms.The current guidelinesownership targets are as follows: Roles | | | Guideline
| | | | | | | Roles | 2023 Ownership Targets
(% of Base Salary) | | CEO, PG&E Corporation | 600 | | 600 | % | President, Pacific Gas and Electric Company Executive Vice Presidents | 300 | | 300 | % | Other Executive OfficersSenior Vice Presidents | 200 | % | | Vice Presidents | 150100 | % |
2021 | | | | | | | 2023 Joint Proxy Statement | 51 |
The Executive Incentive Compensation Recoupment Policy is a robust policy that enables the People and Compensation Committee and Boards to recoup payments made to Section 16 Officers across both companies in defined circumstances, including no-fault scenarios that would negatively impact our shareholders. The policy remains under periodic review to help ensure continued relevance. What | | Why | | | | | | | | What | | Why |
| | | • Long-term cash incentives • Equity-based incentives | | •Financial restatement with the SEC for any of the three most recently completed fiscal years •A material miscalculation with respect to the amount of any payment •Individual involvement in fraud or misconduct that caused material financial or reputational harm
|
The 2012 PG&E Corporation Officer Severance Policy, as amended (Officer Severance Policy), further enables the People and Compensation Committee and Boards to recoup severance rights, payments, and benefits provided to executive officers across both companies (including executive officers as defined in AB 1054) , in defined circumstances. What | | Why | | | | | | | | What | | Why | | | | •Severance benefits | | •Individual misconduct materially contributes to PG&E Corporation or Utility felony conviction relating to public health or safety or company financial misconduct |
The People and Compensation Committee will work with management and Meridian in 2023 to review and, as necessary, update our Executive Incentive Compensation Recoupment Policy to ensure its compliance with new SEC requirements. Anti-Hedging and Anti-Pledging Policy The Insider Trading Policy prohibits certain hedging and pledging activities conducted by the companies’ Board members, officers, and designated employees who are subject to a quarterly earnings blackout period or event-specific blackout period. The policy covers equity instruments related directly or indirectly to either company or their subsidiaries. Covered individuals may not engage in short sales, transactions in publicly traded options, or hedging or monetization transactions; hold securities in a margin account; or pledge securities as collateral for a loan. The People and Compensation Committee refers to two peer groups: one for benchmarking pay and the other for measuring the companies’ relative performance. Distinct groups are maintained to help ensure each is relevant for its primary purpose. In particular, larger companies may be reasonable comparators for performance but not for compensation levels. Pay
Comparator
Group | | • | | | | | | | | | | Pay
Comparator
Group | | • | Provides insights into compensation levels and design within companies that PG&E Corporation and the Utility compete with for talent and that are similar in terms of size and business operations. | | • | Comprises publicly traded gas and electric energy companies, primarily based on the constituents of the Philadelphia Utility Index administered by NASDAQ.companies. | | • | Supplemented by pay practice data from surveys for the broader energy services sector and general industry companies based on survey data. | | | | | Performance
Comparator
Group | | • | Provides comparative benchmark for PG&E Corporation‘s total shareholder return performance, and other relative industry-standard benchmarks that might be considered in goal setting. | | • | Comprises publicly traded gas and electric energy companies that are categorized consistently by the investment community as “regulated” and have a market capitalization of at least $6 billion. |
2021 Joint Proxy Statement | 52 |
Each year the People and Compensation Committee approves the constituents of the pay and performance comparator groups. Informed by recommendations from the independent compensation consultant, the People and Compensation Committee approved the following comparator groups for 2020, which were unchanged relative to the prior respective groups. 2022.Company | Pay | Performance | | | | | | | AES CorporationCompany | | Performance | | AES Corporation | | | | Alliant Energy Corporation | | | | Ameren Corporation | | | | American Electric Power Company, Inc. | | | | CenterPoint Energy, Inc. | | |
| | | | | | | 2023 Joint Proxy Statement | 51 |
There were no changes made to the Pay and Performance Comparator Groups used to inform 2022 decision-making versus the prior years, the groups differ from the constituents of the Philadelphia Utility Index to maximize relevance for companies as follows:• | American Water Works, El Paso Electric and Pinnacle West Capital Corporation were removed due to dissimilar business models or relative size. | • | Sempra Energy was added to the pay comparator group and WEC Energy was added to both groups given their direct relevance, despite not being included in the Index. |
year. In reviewing pay data, the People and Compensation Committee does not adhere strictly to formulas or data to determine the actual mix and amounts of compensation. When referencing positioning against market data, the People and Compensation Committee also considers factors including each NEO’s scope of responsibility and organizational impact, experience, and performance, as well as PG&E Corporation’s and the Utility’s overall safety, operating, and financial results in reaching decisions. This flexibility is important in supporting the overall pay-for-performance philosophy and in meeting the People and Compensation Committee’s objectives of attracting, retaining, and motivating a talented executive leadership team. Incentive Plan Goal Setting To be successful in aligning pay with performance, it is important that performance goals are set appropriately within our incentive plans.programs. For each of the metrics used in our incentive plans, the People and Compensation Committee reviews a comprehensive analysis that typically sets out the following, on a metric-specific basis: • | Data on historic performance, showing multi-year trends; | • | Projected performance on a multi-year basis, driven by workplans and anticipated timing of milestone achievements; | • | Target setting methodology, with recommended ranges around the target to establish threshold and maximum goals; and | • | • Data on historic performance, showing multi-year trends; • Projected performance on a multi-year basis, driven by workplans and anticipated timing of milestone achievements; • Target setting methodology, with recommended ranges around the target to establish threshold and maximum goals; and • Degree of change in the proposed threshold, target, and maximum goals as compared with the prior year. |
While the Compensation Committee monitored the impact of COVID-19 during the year, no changes were made to our incentive metrics or goals for 2020. This reflected the important role that the companies played for our direct and indirect customers during 2020, and no change in the standards was expected despiteproposed threshold, target, and maximum goals as compared with the significant challenges faced.
prior year.Each metric also has associated contacts and approvers to maximize accountability and transparency.
2021 | | | | | | | 2023 Joint Proxy Statement | 5352 |
| | | | 2022 Compensation Decision and Outcomes |
2020 Compensation Decision and Outcomes
During 2020 there were several departures among our executive officers, with others stepping into roles on an interim basis. The impact of these interim duties on 2020 compensation is discussed below.
Base Salary Base salaries are reviewed on an annual basis and are targeted to be within a competitive range of market median for comparable roles in the Pay Comparator Group. In determining each NEO’s base salary, consideration is given to role scope and individual experience and performance. The People and Compensation Committee believes that this level of comparability to market is appropriate and consistent with its pay philosophy of taking into consideration factors other than market data in establishing individual pay levels, while delivering cash compensation that is competitive with the market. In 2019, asreviewing salaries for 2022, adjustments reflected a resultcombination of merit and market adjustments by role, with additional consideration given to the removal of the Chapter 11 Cases, no executive officers received an increase. For 2020, increases ranged from 0 to 15 percent, with an average of 5.8 percent. Increases reflected market realignment, changesperquisite allowance effective in role scope, and promotions. Salaries were2022. Mr. Singh’s increase reflects his promotion effective MarchJanuary 1, 2020, unless otherwise noted. | NEO | | Role (as of 12/31/20) | | 2020 Salary | (1) | Increase | (2) | | William L. Smith | | Interim Chief Executive Officer and President, PG&E Corporation | | | $1,500,000 | | N/A | | | Michael A. Lewis | | Interim President, Pacific Gas and Electric Company | | | $556,500 | | 5.0% | | | Christopher A. Foster(3) | | Vice President and Interim Chief Financial Officer, PG&E Corporation | | | $345,000 | | 15.0% | | | David S. Thomason(4) | | Vice President and Chief Financial Officer and Controller, Pacific Gas and Electric Company | | | $350,000 | | 7.7% | | | John R. Simon | | Executive Vice President, General Counsel and Chief Ethics & Compliance Officer, PG&E Corporation | | | $726,280 | | 4.5% | | | James M. Welsch | | Senior Vice President, Generation and Chief Nuclear Officer, Pacific Gas and Electric Company | | | $577,700 | | 6.0% | | | William D. Johnson | | Former Chief Executive Officer and President, PG&E Corporation | | | $2,500,000 | | 0.0% | | | Andrew M. Vesey | | Former Chief Executive Officer and President, Pacific Gas and Electric Company | | | $1,000,000 | | 0.0% | | | Jason P. Wells | | Former Executive Vice President and Chief Financial Officer, PG&E Corporation | | | $674,100 | | 7.0% | | | Janet C. Loduca | | Former Senior Vice President and General Counsel, PG&E Corporation and Pacific Gas and Electric Company | | | $615,250 | | 7.0% | |
| | | | | | | | | | | | | | | | | | NEO(1) | Role (as of 12/31/22) | 2022 Salary | (1) | Increase | (2) | | Patricia K. Poppe | Chief Executive Officer, PG&E Corporation | $1,400,000 | | 4% | | | Jason M. Glickman | Executive Vice President, Engineering, Planning and Strategy, Pacific Gas and Electric Company | $720,000 | | 7% | | | Marlene M. Santos | Executive Vice President and Chief Customer Officer, Pacific Gas and Electric Company | $875,000 | | 6% | | Adam L. Wright (3) | Executive Vice President, Operations and Chief Operating Officer, Pacific Gas and Electric Company | $875,000 | | 6% | | Christopher A. Foster (4) | Executive Vice President and Chief Financial Officer, PG&E Corporation | $655,000 | | 7% | | David S. Thomason (5) | Vice President, Controller, and Utility Chief Financial Officer, Pacific Gas and Electric Company | $390,370 | | 7% | | | John R. Simon | Executive Vice President, General Counsel and Chief Ethics & Compliance Officer, PG&E Corporation | $820,000 | | 6% | | Sumeet Singh (6) | Executive Vice President, Chief Risk and Chief Safety Officer, Pacific Gas and Electric Company | $675,000 | | 42% | | | Julius Cox | Executive Vice President, People, Shared Services and Supply Chain, Pacific Gas and Electric Company | $645,000 | | 6% | |
Notes. | (1) | | | | | | | | | Notes. | (1) | Annualized salary as of December 31, 2020, or date of termination if applicable.2022. | | (2) | Increase relative to salary as of December 31, 2019. | | (3) | Salary increased from $300,000 to $318,0002021. Salaries were effective March 1, 20202022, unless otherwise noted. | | (3) | Mr. Wright resigned effective February 6, 2023. | | (4) | Mr. Foster is resigning effective May 4, 2023. | | (5) | Mr. Thomason resigned effective January 9, 2023. | | (6) | Mr. Singh’s salary was effective January 1, 2022 in association with annual merit review. Salary increasedhis promotion from $318,000 to $345,000 effective March 9, 2020 in association with the addition of responsibility for Treasury to Mr. Foster’s role. As Interimhis prior role as Senior Vice President, Chief Financial Officer of PG&E Corporation, Mr. Foster received an additional monthly fee of $20,000 starting September 26, 2020, whichRisk Officer. This promotion is not includedalso reflected in his salary. | | (4) | Salary increased from $325,000 to $334,750 effective March 1, 2020 in association with annual merit review. Salary increased from $334,750 to $350,000 effective August 1, 2020 in association with promotion.salary increase for 2022. |
Our Short-Term Incentive Plan (STIP) isSTIP and related awards are designed to drive the companies’ business objectives and strategic priorities, providing an opportunity for a cash payout reflecting the results achieved during the year. The plan focuses on quantifiable outcome-based metrics in the overall company score and includes a modifier forscore. Effective in 2022, the use of individual performance modifiers (IPMs) based on year-end rating.
2021 Joint Proxy Statement | 54 |
ratings was re-instated for all eligible participants, including NEOs, meaning any incentive earned was based on a combination of company and individual performance. This enables greater individual accountability in contributing to our overall success.  The People and Compensation Committee establishes an annual target opportunity, expressed as a percentage of an individual’s base salary, set with reference to market median practices in our Pay Comparator Group. Target opportunities for the NEOs eligible to participate in the program in 20202022 ranged from 4550 percent to 85135 percent of salary.actual salary earned. In respect of the company score, achieving threshold performance will earn a payout at 50 percent of target and achieving maximum performance will earn a payout at 150up to 200 percent of target. After the application of the individual performance modifier, awardsOur Core Commitment Completion metric, weighted at 15 percent, can only be earned up to 187.5100 percent of target, while all other metrics can be earned at up to 200 percent of target if the maximum performance goals are achieved. The individual performance modifier cannot exceed 1.2, with the overall earned incentive subject to a cap of 200 percent of target. The People and Compensation Committee retains complete and sole discretion to adjust any performance formula or score, including to zero, on any and all short-term incentive plan performance measures or modifiers for any reason, including consideration of (without limitation) performance with respect to safety, compliance, and ethics.
Supporting Information: CEO Compensation Considerations | | | | | | In 2019, our CEOs and Chapter 11 insiders were not eligible to participate in the STIP. Mr. Johnson’s three-year compensation arrangement entered into at the time reflected this limitation. Mr. Smith also did not receive an award under the 2020 STIP given the transitionary nature of his role as Interim CEO and President of PG&E Corporation. Further details can be found in the “Interim CEO Compensation” section starting on page 61.2023 Joint Proxy Statement | 53 |
The fundamentals of the company performance assessment in 2022 were consistent with 2021. The People and Compensation Committee established 20202022 metrics across sixthe same three performance areas, weightedretaining a weighting of 75 percent towards metrics that focus on underlying objectives tied to customer welfare and safety, and 25 percent towards financial stability, which itself is inherently tied to our safety performance. 
In determining and approving the appropriate performance metrics in each of these performance areas the People and Compensation Committee considered factors including: • | The alignment with our fundamental belief that safety is paramount, complemented by a focus on customer welfare across all aspects of our business. | | | • | The interaction between metrics to help ensure they collectively drive the right behaviors. For example, an overly narrow focus on reporting might result in employees failing to seek appropriate medical treatment for work-related injuries in order to keep reported injury metrics low. | | | • | Guidance from the CPUC reinforcing the priority placed on outcome-based metrics for alignment with reducing the companies’ highest-priority risks, such as the risk of catastrophic events like wildfires, dam failures, or gas explosions. | | | • | The companies’ ability to establish robust threshold, target, and maximum achievement milestones. | | | • | The proportion of metrics that are outcome-based, as opposed to metrics that are based on operational activity or effort. |
2021 Joint Proxy Statement | 55 |
• The alignment with our fundamental belief that safety is paramount, complemented by a focus on customer welfare across all aspects of our business. • The interaction between metrics to help ensure they collectively drive the right behaviors. For example, an overly narrow focus on reporting might result in employees failing to seek appropriate medical treatment for work-related injuries in order to keep reported injury metrics low. • Guidance from the CPUC reinforcing the priority placed on outcome-based metrics for alignment with reducing the companies’ highest-priority risks, such as the risk of catastrophic events like wildfires, dam failures, or gas explosions. • The companies’ ability to establish robust threshold, target, and maximum achievement milestones. • The proportion of metrics that are outcome-based, as opposed to metrics that are based on operational activity or effort. As described in the earlier “Incentive Plan Goal Setting” section on page 53,52, in approving performance goals, the People and Compensation Committee references a range of factors including historic performance inclusive of multi-year trends; projected performance driven by workplans and anticipated timing of milestone achievements; the target-setting methodology, with recommended ranges around target to establish threshold and maximum goals; and the degree of change the proposed goals represent versus the prior year. Each metric has a clear definition with a predetermined and pre-approved calculation methodology. Metric | | Definition(1) | | | | ReportableMetric | Definition(1) | | Wildfire risk reduction | The count of Fire Ignitions that result in fires equal to or greater than 100 acres in PG&E’s HFTD and reportable to the CPUC per Decision 14-02-015. A reportable fire ignitions | | Reportableincident per Decision 14-02-015 is a fire incidents whereevent that meets the following criteria: (i) ignition is associated with the Utility’sPG&E powerlines (both transmission and/or distribution powerlines,and distribution); (ii) something other than UtilityPG&E facilities burned, and (iii) the resulting fire traveledtravelled more than one meter from the ignition pointpoint. Reportable Fire Ignitions that result in fires ≥100 acres in PG&E’s HFTD for which PG&E submits an Electric Incidents report (EIR) are counted. If the ignition source for a fire ≥100 acres in PG&E’s HFTD is unknown or disputed, it will also be counted if PG&E records a financial reserve associated with that ignition | Electric asset failureReportable fire ignitions | | FailureFire incidents of electricthat meet the following criteria: (i) occur within a PG&E HFTD; (ii) and is reportable to the CPUC per Decision 14-02-015. A reportable fire incident includes all the following: 1) Ignition is associated with PG&E overhead distribution transmission,circuits, 2) something other than PG&E facilities burned, and substation underground and overhead assets3) the resulting in sustained outages, including (i) distribution and distribution substation asset failures limited to high risk threat district (HRFD) areas, and (ii) transmission and transmission substation asset failures system-widefire travelled more than one meter from the ignition point. | | Quality pass rate | Equally weighted index that tracks the quality of four core Wildfire Mitigation programs as measured by:
(i) Percentage of Distribution circuit sectionalizationInspections performed in HFTD that pass the field Quality Verification reviews and contain no critical defects.
(ii) Percentage of Transmission Inspections performed in HFTD that pass the field Quality Verification reviews and contain no critical defects.
(iii) Percentage of the completed Enhanced Vegetation Management (EVM) work that passes the Quality Verification field reviews
(iv) Percentage of the completed Routine Vegetation Management in HFTD work that passes the Quality Verification reviews |
| | Timely installation and operationalization of sectionalization devices | | | | Large overpressure events2023 Joint Proxy Statement | 54 |
| Number of large overpressure events (when gas pressure exceeds the maximum allowable operating pressure), with pre-established pressure limits | | | | | | Metric | Definition(1) | | Core commitment completion | The metric measures timely completion of five core commitments across two key areas in the Wildfire Mitigation Plan (WMP): (i) Reduce Wildfire Potential: 1) Distribution System Inspections 2) Transmission System Inspections 3) Substation Inspections 4) Replacement of Non-Exempt Expulsion Fuses (ii) Reduce Impact of PSPS: 5) Distribution Sectionalization Devices. The metric is measured as a percentage of the five commitments meeting the time and work volume targets that PG&E commits to in the annual WMP. If the commitment work volume is achieved but the due date is missed (“Late” commitment), it will be considered as missed for the purposes of the metric. Core Commitment Completion = Distribution Inspections Completion Value (25 percent) + Transmission Inspections Completion Value (25 percent) + Substation Inspections Completion Value (10 percent) + Replacement of Non-Exempt Expulsion Fuses Completion Value (20 percent) + Distribution Sectionalization Devices Completion Value (20 percent) | | Non-fatal serious injuries actuals | A work-related high-energy incident from work at/ for PG&E that results in any of the following to employees, contractors, or directly supervised contractors: (i) a life-threatening injury or illness that required immediate life-preserving action that if not applied immediately would likely have resulted in the death of that person; or (ii) a life-altering injury or illness that resulted in a permanent and significant loss of a major body part or organ function.
Metric will include motor vehicle incidents.
Metric will be reported as a count.
Metric excludes fatalities and potential SIF events. | Total gas dig-ins reductionsdig-in rate | | NumberThis metric tracks the number of gas dig-ins (damage thatper 1,000 Underground Service Alert (USA) tickets received. The dig-in component tracks all gas dig-ins to PG&E gas subsurface installations. A dig-in refers to damage which occurs during excavation activities (impact or exposure) and results in a repair or replacement of an underground gas facility) per 1,000 Underground Service Alert (third party public service program) tickets received for gasfacility. | | Preventable motor vehicle incidents | A Preventable Motor Vehicle Incident (PMVI) is any incident where the PG&E driver could have but failed to take reasonable steps to prevent the incident. Includes company, rental and personal vehicles driven for company business. Count of all PMVIs*1M/Total Company Miles Driven. | | DCPP reliability and safety indicator | The year-end combined (average) score for Unit 1 and Unit 2, representing a composite of 10 performance indicators for nuclear power generation developed by the nuclear industry and applied to all U.S. nuclear power plants. Indicator performance periods range from 18 to 36 months (rolling). | | Safe dam operating capacity | | OperatingMeasure of operating capability of mechanical equipment used as main control to reduce the enterprise risk of large uncontrolled water release, calculated with referencea Large Uncontrolled Water Release (LUWR). Expanded to controlled outlet days forced outinclude planned and controlled outlet days availableunplanned unavailability (previously only unplanned). | DCPP reliabilityCustomers experiencing multiple interruptions | CEMI-5 is the total number of customers experiencing 5 or more sustained interruptions (planned/unplanned) and safety indicator | | Year-end score based on 11 performance indicators developed byCEMI-10 is the nuclear industrytotal number of customers experiencing 10 or more sustained interruptions (planned/unplanned); both metrics are reported as a YTD measure for nuclear power generation applied to all U.S. nuclear power plansa rolling 12-month period. Metric calculated as a composite index with total CEMI-5 and CEMI-10 scores each contributing 50 percent. | Gas customer emergency response time | | Number of minutesThe average response time for immediate response (IR) orders. The response time by PG&E is measured from the time the UtilityPG&E is notified to the time the Utility personnela Gas Service Representative (GSR) or anothera qualified first responder arrives onsite to the locationemergency location. PG&E notification time is defined as when a gas emergency order is created and timestamped. | | Electric 911 emergency response | | PercentageMeasures the percentage of incidents where Utilitytime that PG&E personnel arrive onsiterespond (are on site) within 60 minutes ofafter receiving a 911 call, with onsite defined as arriving at the premises where the 911 agency personnel are waiting | Customers experiencing multiple interruptions | | Number of customers who experience five or more sustained service interruptions, both planned and unplanned | Days away, restricted, and transferred rate | | Number of Occupational Safety and Health Administration (OSHA) recordable cases that have resulted in at least one lost workday or one day of job restriction or transfer; excludes fatalities | | Non-GAAP core earnings per share | | Actual GAAPFinancial performance from ongoing core operations, in dollars per share. The measurement is Non-GAAP core earnings. Non-GAAP core earnings from operations lessexcludes non-core items meaning items(expenses that (i) managementManagement does not consider representative of ongoing earnings and (ii) affectaffects comparability of financial results between periods. See Exhibit A forperiods). For purposes of the 2022 STIP performance, if core earnings is positive, the result will be divided by diluted shares. If core earnings is a list of non-core items.loss, the result will be divided by basic shares. |
Notes. | (1) | | | | | | | | | Notes. | (1) | These are abbreviated summary definitions and may not reflect complete details, including certain exclusions, for each metric. |
The metrics and associated goals were initially proposed in February 2020 and approved after emergence from Chapter 11 in July 2020. The Compensation Committee did not make any adjustments in response to COVID-19 given the imperative to continue operating at a high standard and to meet the needs of our customers through the crisis.
2021 Joint Proxy Statement | 56 |
In the first quarter of 2021,2023, the People and Compensation Committee reviewed and certified the following results for the company score: | Performance Metric | | Weight | | | Threshold (25%) | | | Target (100%) | | Maximum (150%) | | | Actual | | | Unweighted Score | | Weighted Score | | | Electric Operations | | 25% | | | | | | | | | | | | | | | | 0.202 | | | Reportable fire ignitions | | 10% | | | 105 | | | 101 | | 96 | | | 148 | | | 0.000 | | | | | Electric asset failure | | 10% | | | 2,328 | | | 2,166 | | 2,058 | | | 1,823 | | | 1.500 | | | | | Distribution circuit sectionalization | | 5% | | | October 1 | | | September 1 | | June 1 | | | August 26 | | | 1.033 | | | | | Gas Operations | | 15% | | | | | | | | | | | | | | | | 0.113 | | | Large overpressure events | | 7.5% | | | 8 | | | 6 | | 4 | | | 9 | | | 0.000 | | | | | Total dig-ins reductions | | 7.5% | | | 1.53 | | | 1.44 | | 1.28 | | | 1.11 | | | 1.500 | | | | | Generation | | 10% | | | | | | | | | | | | | | | | 0.097 | | | Safe dam operating capacity | | 5% | | | 96.92% | | | 97.70% | | 98.92% | | | 98.77% | | | 1.439 | | | | | DCPP reliability and safety indicator | | 5% | | | 92.5 | | | 95.0 | | 97.5 | | | 92.5 | | | 0.500 | | | | | Additional Public Safety & Reliability | | 10% | | | | | | | | | | | | | | | | 0.084 | | | Gas customer emergency response | | 3.3% | | | 22.0 | | | 20.8 | | 20.0 | | | 20.5 | | | 1.188 | | | | | 911 emergency response | | 3.3% | | | 95.5% | | | 96.5% | | 97.5% | | | 97.2% | | | 1.345 | | | | | Customers experiencing multiple interruptions | | 3.3% | | | 3.28% | | | 3.12% | | 3.05% | | | 3.56% | | | 0.000 | | | | | Workforce Safety | | 15% | | | | | | | | | | | | | | | | 0.000 | | | Days away, restricted, and transferred rate | | 15% | | | 1.19 | | | 0.90 | | 0.81 | | | 1.34 | | | 0.000 | | | | | Financial Stability | | 25% | | | | | | | | | | | | | | | | 0.188 | | | Non-GAAP core earnings per share | | 25% | | | 1.53 | | | 1.61 | | 1.69 | | | 1.61 | | | 1.000 | | | | | 2020 Overall Short-Term Incentive Plan Company Score | | | | | | | | 0.746 | | | 2020 Overall Short-Term Incentive Plan Company Score for NEOs (after discretion) | | | | | 0.650 | |
In reviewing company and NEO performance for 2020, the Compensation Committee considered the totality of circumstances over the year, including but not limited to:
| | | | | | | | | | | | | | | | | | | | | | | | | Performance Metrics | Weight | Threshold
(50%) | Target
(100%) | Maximum
(200%) | Actual | Unweighted
Score | Weighted
Score | | Safety | | | | | | | | | Wildfire Risk Reduction | 15% | 2 | 1 | 0 | 1 | 1.000 | 0.150 | | Reportable Fire Ignitions | 5% | 116 | 103 | 90 | 89 | 2.000 | 0.100 | | Quality Pass Rate | 5% | 0.500 | 1.000 | 2.000 | 0.850 | 0.849 | 0.043 | | Core Commitment Completion | 15% | 80% | 100% | N/A | 100% | 1.000 | 0.150 | | Non-Fatal Serious Injury Actuals | 5% | 2 | 1 | 0 | 4 | 0.000 | 0.000 |
• | The Utility’s overall public and workforce safety, which included five fatalities from the company and contractor workforces; | | | | | | 2023 Joint Proxy Statement | | • | The possibility that Utility assets were the ignition source of the Zogg fire, which resulted in four public fatalities and property damage; | | | • | Compliance fines levied against the Utility by regulators; and | | | • | Reports provided to the Boards by the Federal Monitor on the Utility’s operational and safety performance.55 |
| | | | | | | | | | | | | | | | | | | | | | | | | Operate Safely Index: | | | | | | | | | Total Gas Dig-In Rate | 5% | 1.13 | 0.98 | 0.95 | 0.94 | 2.000 | 0.100 | | Preventable Motor Vehicle Incidents | 5% | 2.68 | 2.61 | 2.54 | 2.58 | 1.429 | 0.071 | | DCPP Reliability and Safety Indicator | 5% | 87.40 | 94.00 | 97.40 | 96.00 | 1.588 | 0.079 | | Safe Dam Operating Capacity | 5% | 95.11% | 96.22% | 97.32% | 96.93% | 1.645 | 0.082 | | Customer | | | | | | | | | CEMI-5 / CEMI-10 | 5% | 0.500 | 1.000 | 2.000 | 0.850 | 0.850 | 0.043 | | Respond to Emergencies Index: | | | | | | | | | Gas Emergency Response | 2.5% | 21 | 20.5 | 20.0 | 19.9 | 2.000 | 0.050 | | Electric 911 Emergency Response | 2.5% | 96.01% | 97.30% | 98.13% | 98.23% | 2.000 | 0.050 | | Financial | | | | | | | | | Non-GAAP Core Earnings per Share | 25% | $1.05 | $1.10 | $1.15 | $1.10 | 1.000 | 0.250 | | 2022 Overall Short-Term Incentive Plan Company Score | | | 1.168 |
In addition, to discussions with management,assess company performance relative to the above scorecard, the People and Compensation Committee consulted with independent compensation consultantscan apply an modifier to reflect individual performance during the year via the IPM. This can modify awards to as low as zero and outside legal counselup to review120 percent. Following an assessment of individual performance in 2022, IPMs ranging from 80 – 109 percent were approved. The table below shows the range of actions taken by other utilities in comparable circumstances.Based upon the totality of the circumstances described above, management’s proposal, and extensive consideration, the Compensation Committee determined to exercise its discretion to materially reduceshort-term incentive compensation paid to all NEOs and officers foreach of the STIP 2020 performance year and the 2018 LTIP performance period ending in 2020. These actions resulted in a reduction of incentive compensation, in the form of 2020 STIP payments and 2018 performance share payments, to officers for 2020 by an average of 58 percent from target for those elements of incentives.
The Compensation Committee arrived at the overall reduction in part by reducing the STIP company score for NEOs and officers from 0.746 to 0.650. The Compensation Committee also reduced the payout with respect to the PSUs awarded in 2018 as described further in the “Assessment of 2018 Performance Share Awards” section below.
In respect of individual performance, for the 2020 performance year, a modifier is applied based on annual performance ratings. The following payments reflect approved individual performance modifiers, and were approved in respect of 2020 performance.
2021 Joint Proxy Statement | 57 |
NEOs: | | | | | | | | | | | | | | | | | | | | | NEO(1) | Target Incentive
(percent of
Base) | Target
Incentive | Company
Score | Individual Performance Modifier(1) | Actual
Incentive | Actual
Incentive
(percent of
Target) | | Patricia K. Poppe | 135% | 1,890,000 | 1.168 | 100 | % | $2,207,520 | 117 | % | | Jason M. Glickman | 75% | 534,375 | 1.168 | 101 | % | $630,392 | 118 | % | | Marlene M. Santos | 90% | 780,000 | 1.168 | 109 | % | $993,034 | 127 | % | | Adam L. Wright | 90% | 780,000 | 1.168 | 100 | % | $911,040 | 117 | % | | Christopher A. Foster | 75% | 486,250 | 1.168 | 80 | % | $454,352 | 93 | % | | David S. Thomason | 50% | 192,988 | 1.168 | 90 | % | $202,868 | 105 | % | | John R. Simon | 75% | 609,186 | 1.168 | 102 | % | $725,760 | 119 | % | | Sumeet Singh | 75% | 506,250 | 1.168 | 101 | % | $597,213 | 118 | % | | Julius Cox | 75% | 479,375 | 1.168 | 100 | % | $559,910 | 117 | % |
| | | | | | | | | | Notes. | (1) | The 2022 STIP base award for each NEO was subject to upward or downward adjustment for individual performance on key performance variables. The Individual Performance Modifier can range from zero to 120 percent of the base award, with a potential maximum total award at 200 percent of each NEO’s target opportunity. |
| NEO | | Target Incentive (percent of Base) | | Target Incentive | | Company Score | | Individual
Performance Modifier | | Actual Incentive | | Actual Incentive (percent of Target) | | Michael A. Lewis | | 60% | | $343,931 | | 0.650 | | 100% | | $223,555 | | 65% | | Christopher A. Foster | | 45% | | $151,645 | | 0.650 | | 110% | | $108,426 | | 72% | | David S. Thomason(1) | | 50% | | $160,057 | | 0.650 | | 110% | | $114,441 | | 72% | | John R. Simon | | 75% | | $540,800 | | 0.650 | | 125% | | $439,400 | | 81% | | James M. Welsch | | 60% | | $343,350 | | 0.650 | | 110% | | $245,495 | | 72% |
Notes. | (1) | Target opportunity increased from 45% to 50% effective August 1, 2020 in association with promotion. |
Following her separation from the companies, Ms. Loduca received a 2020 short-term incentive payment based on actual company performance, pro-rated for her time in role prior to separation. Mr. Wells received no short-term incentive payments for 2020 performance, consistent with his resignation from PG&E Corporation. Following his separation from the Utility, Mr. Vesey received a lump-sum payment equivalent to his target payout under the 2020 short-term incentive plan and waived his right to a pro-rated 2020 short-term incentive payout reflecting company performance at the end of the performance period. Additional details regarding severance benefits can be found in the sections entitled “Potential Payments—Termination Without Cause” beginning on page 83.
Long-Term Incentives 2020
2022 Long-Term Incentive Awards Our LTIP awards are designed to measure and incentivize our success in ensuring operational continuity and employee engagement through a focus on customer welfare and our financial stability. For 2020,2022, all NEO awards were made solely in the form of performance-based equity. Reflecting our emergence from Chapter 11, In 2022, the People and Compensation Committee established annual target opportunities for each NEO, expressed as absolute dollar values. | | | | | | | | | | | | | | | NEO(1) | Role (as of 12/31/22) | 2022 Target
Long-Term
Incentive | 2022 Equity Mix | | PSUs | RSUs | | Patricia K. Poppe | Chief Executive Officer, PG&E Corporation | $9,500,000 | 100% | 0% | | Jason M. Glickman | Executive Vice President, Engineering, Planning and Strategy, Pacific Gas and Electric Company | $1,750,000 | 100% | 0% | | Marlene M. Santos | Executive Vice President and Chief Customer Officer, Pacific Gas and Electric Company | $2,600,000 | 100% | 0% | | Adam L. Wright | Executive Vice President, Operations and Chief Operating Officer, Pacific Gas and Electric Company | $2,600,000 | 100% | 0% | | Christopher A. Foster | Executive Vice President and Chief Financial Officer, PG&E Corporation | $1,750,000 | 100% | 0% |
| | | | | | | 2023 Joint Proxy Statement | 56 |
| | | | | | | | | | | | | | | NEO(1) | Role (as of 12/31/22) | 2022 Target
Long-Term
Incentive | 2022 Equity Mix | | David S. Thomason | Vice President, Controller, and Utility Chief Financial Officer, Pacific Gas and Electric Company | $400,000 | 100% | 0% | | John R. Simon | Executive Vice President, General Counsel and Chief Ethics & Compliance Officer, PG&E Corporation | $1,750,000 | 100% | 0% | | Sumeet Singh | Executive Vice President, Chief Risk and Chief Safety Officer, Pacific Gas and Electric Company | $1,750,000 | 100% | 0% | | Julius Cox | Executive Vice President, People, Shared Services and Supply Chain, Pacific Gas and Electric Company | $1,250,000 | 100% | 0% |
As a result of a clerical error, the initial number of PSUs awarded in respect of the 2022 target values approved by the People and Compensation Committee was incorrect. Following the discovery of this error, the awards were updated by means of a supplemental grant to ensure the underlying number of PSUs correctly reflected the approved target values, as adjusted. Further details can be found in the footnotes to the Grants of Plan-Based Awards Table on page 65. A similar error was found in respect of the 2021 awards. Accordingly, for the 2021 PSUs, the Companies requested, and the executive officers consented to, the return of excess 2021 PSUs that had been granted using the originally calculated target value, as detailed in the footnotes to the Grants of Plan-Based Awards Table on page 65. Performance Share Units All executive officers received 100 percent of the annual equity grant values in March 2020, which were converted into PSUs in July based on the average closing priceform of PG&E Corporation’s common stock on the first 15 consecutive trading days following emergence.Metrics were quantifiable, and where possible outcome-based, andPSUs. Performance will be measured over the three-year performance period from January 20202022 to December 2022. Awards can be earned depending on2024 and vest to the extent threshold or greater performance over the three-year period ending December 31, 2022, and will vest, subject to performance,objectives are accomplished three years after the grant date, in accordance with the three-year holding period for equity required under AB 1054. Dividend equivalents, if any, are accrued and paid in cash at the end of the performance period on earned shares only. In 2020, the Compensation Committee established annual target opportunities for each NEO, expressed as an absolute dollar values.
NEO | | Role | | 2020 Target
Long-Term
Incentive
| Michael A. Lewis(1) | | Interim President, Pacific GasThe People and Electric Company | | $700,000 | Christopher A. Foster | | Vice President and Interim Chief Financial Officer, PG&E Corporation | | $300,000 | David S. Thomason | | Vice President and Chief Financial Officer and Controller, Pacific Gas and Electric Company | | $400,000 | John R. Simon | | Executive Vice President, General Counsel and Chief Ethics & Compliance Officer, PG&E Corporation | | $1,750,000 | James M. Welsch | | Senior Vice President, Generation and Chief Nuclear Officer, Pacific Gas and Electric Company | | $650,000 | Andrew M. Vesey(2) | | Former CEO and President, Pacific Gas and Electric Company | | $2,250,000 | Jason P. Wells(3) | | Former Executive Vice President and Chief Financial Officer, PG&E Corporation | | $1,750,000 | Janet C. Loduca(4) | | Former Senior Vice President and General Counsel, PG&E Corporation and Pacific Gas and Electric Company | | $1,200,000 |
| | | Notes. | (1) | Consists of a base award of $650,000 and a supplementary award of $50,000 reflecting Interim President duties a portion of 2020. | | | | | (2) | Separated effective August 4, 2020; reflecting the terms of separation, Mr. Vesey was not granted a 2020 long-term incentive award. | | | | | (3) | Resigned effective September 26, 2020; forfeited 2020 long-term incentive award. | | | | | (4) | Separated effective August 16, 2020; pro-rated award remains subject to the original award terms for severance. |
Compensation Committee retains complete and sole discretion to adjust any performance formula or score, including to zero, on any and all incentive plan performance measures or modifiers for any reason. 2021 Joint Proxy Statement | 58 |
Supporting Information: CEO Compensation Considerations
In 2019, our CEOs and Chapter 11 insiders were not eligible to participate in the LTIP. Mr. Johnson’s three-year compensation arrangement entered into at the time reflected this limitation. Mr. Smith also did not receive an annual LTIP award on the same terms as other executives in 2020 given the transitionary nature of his role as Interim CEO and President of PG&E Corporation. Further details can be found in the “Interim CEO Compensation” section starting on page 61.
Supporting Information: Chapter 11 Considerations
The addition of 30 million shares to be made available for issuance under the 2021 LTIP was approved by the Bankruptcy Court in connection with the Plan of Reorganization and further approved by PG&E Corporation’s Board on April 28, 2020. Under California law, approval of the additional shares for the 2021 LTIP as part of the reorganization was deemed to be approved by PG&E Corporation’s shareholders.
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In determining the performance metrics for the 20202022 awards, the People and Compensation Committee considered a range of factors similar to those noted above in respect of the STIP.2021 STIP awards. These included alignment with our core focus on customer welfare; the interaction with other metrics under the short- and long-term incentive programs; the companies’ ability to establish robust goals; and the extent to which the metrics measure outcomes in an objective manner. Four equally weightedSix metrics were approved for the 20202022 awards with aas shown in the table below. | | | | | | | | | | | | | | | | Performance Metric | Weight | Threshold
(50%) | Target
(100%) | Maximum
(200%) | | Customer Experience | 30% | | | | | Customer satisfaction score | 15% | 73.0 | 76.0 | 78.5 | | System average interruption duration index (SAIDI) | 15% | 384.2 | 376.7 | 327.9 | | Public Safety | 40% | | | | | System hardening effectiveness (risk miles) | 20% | 1,701 | 1,790 | 1,956 | | Enhanced vegetation management effectiveness (risk miles) | 20% | 5,400 | 5,670 | 6,210 | | Financial Stability | 30% | | | | Greater affordability for customers (millions)(1) | 15% | N/D | N/D | N/D | Relative total shareholder return (TSR)(2) | 15% | 25th Percentile | 50th Percentile | 90th Percentile |
| | | | | | | | | | Notes: | (1) | The targets are based on non-GAAP core earnings excluding unrecoverable interest expense, compared to authorized earnings. Accordingly, the associated targets are material non-public information and therefore not included in this disclosure. | | (2) | Comparator companies comprised those listed in our 2022 Performance Comparator Group: Alliant Energy Corporation, Ameren Corporation, American Electric Power Company, Inc., CMS Energy Corporation, Consolidated Edison, Inc., Duke Energy Corporation, Edison International, Evergy, Inc., Eversource Energy, FirstEnergy Corp., NiSource Inc., Pinnacle West Capital Corporation, The Southern Company, WEC Energy Group, Inc., and Xcel Energy Inc. See “Use of Market Data” section on page 46 for details on peer group selection. |
Actual performance relative TSR modifier that could adjustto the levelgoals approved by the People and Compensation Committee will be disclosed, to the extent it is not considered commercially sensitive, following the conclusion of payout up or down by up to 25 percent, depending on PG&E Corporation’s relative performance.the three-year performance period and certification of results in the first quarter of 2025. The People and Compensation Committee retains complete discretion to adjust the formula and results and the final score, including to zero, on any and all incentive plan performance measures for any reason. 
| Performance Metric and Definition | Weight | Threshold
(25%) | Target
(100%) | Maximum
(200%) | | Customer Satisfaction Score | Customer responses to “How would you rate the products and/or services offered by PG&E?” in a quarterly survey conducted by a third party | 25% | 71.7 | 72.3 | 74.4 | | PSPS Notification Accuracy | Percentage of PSPS-affected customers who receive notifications at least 12 hours in advance of a PSPS outage | 25% | 98.0% | 99.0% | 99.9% | | System Hardening | Completion of (i) rebuild of overhead circuitry to current hardening design standards; (ii) targeted undergrounding; or (iii) elimination of overhead circuitry | 25% | 919 miles | 1,021 miles | 1,225 miles | | Substation Enablement | The number of substations, out of a possible 64 substations, that are “energizable” during a transmission-level PSPS event | 25% | 30 substations | 40 substations | 50 substations |
While our success All PSUs may be subject to earlier vesting or forfeiture upon certain events, in delivering safe and reliable services to customers is
accordance with the core focusterms of the 2020 PSU awards, the level of vesting may be modified to reflect our financial stability as measured by relative TSR.Performance Metric and Definition | Weight | Threshold
0.75x | Target
1.00x | Maximum
1.25x | PG&E Corporation’s TSR compared to a group of select comparator companies(1) | Modifier | 25th percentile | 50th percentile | 80th percentile |
Notes: | (1) | Comparator companies included: Alliant Energy Corporation, Ameren Corporation, American Electric Power Company, Inc., CMS Energy Corporation, Consolidated Edison, Inc., DTE Energy Company, Duke Energy Corporation, Edison International, Evergy, Inc., Eversource Energy, NiSource Inc., Pinnacle West Capital Corporation, Southern Company, WEC Energy Group, Inc., and Xcel Energy Inc. See “Use of Market Data” section on page 52 for details on peer group selection. |
Actual performance relative to the goals approved by the Compensation Committee will be disclosed following the conclusion of the three-year performance period and certification of results in the first quarter of 2023.
2021 Joint Proxy Statement | 59 |
Assessment of 2018 Performance Share2020 Long-Term Incentive Awards The three-year performance period for the 20182020 PSU awards concluded on December 31, 2020.2022. The 20182020 PSUs were subject to three performance metrics reflecting strategic priorities at the time of grant: relative TSR,core focus on customer welfare, public safety and earnings from operations per share.financial stability. In the first quarter of 2021,2023, the People and Compensation Committee assessed performance over the three-year
| | | | | | | 2023 Joint Proxy Statement | 57 |
performance period, and similarperiod. Payout amounts were determined by multiplying the number of 2020 vested PSUs by the overall 2020 PSU metric score of 1.395. | | | | | | | | | | | | | | | | | | | | | | | | | Performance Metrics | Weight | Threshold
(50%) | Target
(100%) | Maximum (200%) | Actual | Unweighted
Score | Weighted
Score | | Customer Experience | 50% | | | | | | | | Customer satisfaction score | 25% | 71.7 | 72.3 | 74.4 | 72.0 | 0.718 | 0.180 | | PSPS notification accuracy | 25% | 98.0% | 99.0% | 99.9% | 98.3% | 0.673 | 0.168 | | Public Safety | 50% | | | | | | | | System hardening | 25% | 919 | 1,021 | 1,225 | 1,036 | 1.073 | 0.268 | | Substation enablement | 25% | 30 | 40 | 50 | 62 | 2.000 | 0.500 | | Financial Modifier | Modifier | | | | | Relative Total Shareholder Return | 0.75 – 1.25 | 25th Percentile | 50th Percentile | 90th Percentile | 100th Percentile | 1.250 | | | | | Overall 2020 PSU Metric Score (with modifier) | 1.395 |
Other LTIP Matters During 2022, PG&E Corporation authorized the amendment of certain LTIP equity award agreements to provide the STIP, no adjustments were madecompany with flexibility to account forincrease the impact of COVID-19applicable tax withholding percentages used as high as the Compensation Committee did not believe this wasmaximum withholding rates when determining the actual number of shares delivered to a relevant consideration.| Performance Metric | Weight(3) | Threshold
(25%) | Target
(100%) | Maximum
(200%) | Actual
Performance | Formula-
Based
Payout | Actual
Payout | | PG&E Corporation’s TSR compared to a group of select comparator companies(1) | 57% | 25th
Percentile | 60th
Percentile | 90th
Percentile | 0th
percentile | 0% | 0% | | Serious Injury and Fatality (SIF) actual, potential injury or near-hit events | 29% | ≥122 | 111 | ≤101 | 81 | 200% | 0% | | Earnings from operations per share based on average annual performance(2) | 14% | 95% of
Target | Guidance | 105% of
Target | 99% of
Target | 98% | 0% | | Total weighted payout | | | | | | 72% | 0% |
Notes: | (1) | Comparator companies included: Alliant Energy Corporation, Ameren Corporation, American Electric Power Company, Inc., CMS Energy Corporation, Consolidated Edison, Inc., DTE Energy Company, Duke Energy Corporation, Edison International Eversource Energy, NiSource Inc., Pinnacle West Capital Corporation, SCANA Corporation, Southern Company, WEC Energy Group, Inc., Xcel Energy Inc. | | (2) | This measure is non-GAAP: Adjusted to exclude items that impacted comparability as described in “Exhibit A,” starting on page 67. | | (3) | Weights in the table are expressed as a percentage of the PSU component of the 2018 total LTIP award mix (which also included RSUs). PSUs made up 35% of the total LTIP award mix in 2018; PSUs with TSR, SIF, and earnings per share metrics made up 20%, 10% and 5% of total LTIP award mix, respectively. |
In reviewing company and NEO performance for 2020,participant following the Compensation Committee considered the totalityvesting of circumstances over the year, including but not limited to:
• | The Utility’s overall public and workforce safety, which included five fatalities from the company and contractor workforces; | • | The possibility that Utility assets were the ignition source of the Zogg fire, which resulted in four public fatalities and property damage; | • | Compliance fines levied against the Utility by regulators; and | • | Reports provided to the Boards by the Federal Monitor on the Utility’s operational and safety performance. |
In additionan LTIP award (which is delivered net of shares deemed sufficient to discussions with management, the Compensation Committee consulted with independent compensation consultants and outside legal counsel to review the range of actions taken by other utilities in comparable circumstances.
Based upon the totality of the circumstances described above, management’s proposal, and extensive consideration, the Compensation Committee determined to exercise its discretion to materially reduce incentive compensation paid to all NEOs and officers for the STIP 2020 performance year and the 2018 LTIP performance period ending in 2020. These actions resulted in a reduction of incentive compensation, in the form of 2020 STIP payments and 2018 performance share payments, to officers for 2020 by an average of 58 percent from target for those elements of incentives.
The Compensation Committee arrived at the overall reduction in part by reducing the 2018 PSU awards payout for NEOs and officers to zero. The Compensation Committee also reduced the payout in respect of the STIP company score as described further in the “Short-Term Incentives” section above.
Retention Awards
2020 was a transition year for the companies, with our emergence from bankruptcy and changes in our leadership team. In August 2020,satisfy certain PG&E withholding obligations). Additionally, the Compensation Committee approved one-time retention awards for four NEOs to secure their continued service. The Compensation Committee believed continuity in leadership was in shareholders’ best interests and that making such awards was a market-typical practice in periods of significant organizational and leadership transition.
2021 Joint Proxy Statement | 60 |
Messrs. Simon and Wells each received an award of RSUs at the value of $1,312,500 scheduled to vest in two equal tranches in August 2021 and August 2022. Following his resignation in September 2020, Mr. Wells forfeited his retention award in full. Messrs. Thomason and Welsch each received an award of PSUs, subjectchanges to the same termsoriginal targets relating to system hardening effectiveness, enhanced vegetation management, and conditionsgreater affordability for customers for the 2021 awards, as indicated below. The Committee decided to change the 2020 PSU awards, described above, and reflecting our POR OII commitments that precludedtarget for system hardening to more closely align the award of RSUs to these NEOstarget with PG&E’s Wildfire Mitigation Plan, which contemplates fewer system hardening miles than were anticipated when the 2021 program design was established. The Committee also changed the enhanced vegetation management target in 2020.
| NEO | Terms | | 2020
Retention
Award | | David S. Thomason | PSUs subject to the same terms as the 2020 PSU awards | $ | 300,000 | | John R. Simon | RSUs with 50% vesting in August 2021 and 50% vesting in August 2022 | $ | 1,312,500 | | James M. Welsch | PSUs subject to the same terms as the 2020 PSU awards | $ | 488,000 | | Jason P. Wells (1) | RSUs with 50% vesting in August 2021 and 50% vesting in August 2022 | $ | 1,312,500 |
Notes. | (1) | Award forfeited in full on resignation effective September 26, 2020. |
Interim CEO Compensation
Mr. Johnson retired as CEO and President of PG&E Corporation effective July 1, 2020. From June 30, 2020, Mr. Smith served in the role of Interim CEO and President of PG&E Corporation until Ms. Poppe’s start date.
The Compensation Committee approved a compensation package that reflected the unique and transitionary nature of Mr. Smith’s role. This package comprised an annualized base salary of $1,500,000 and a total target equity award value of $5,000,000, pro-rated to reflect employment in 2020. The equity award combined a grant of RSUs with PSUs:
Compensation
Element | Details | Base Salary | • | $1,500,000 annual base salary | | • | $755,682 received in 2020 in respect of time employed | Short-Term Incentive | • | Not eligible to participate | RSUs | • | 30% of the total equity award value | | • | Award value of $1,500,000 | | • | Award vested on the election of a PG&E Corporation CEO in accordance with the approved terms | PSUs | • | 70% of the equity award value | | • | Annualized target award value of $3,500,000 pro-rated to reflect employment in 2020; the number of shares vesting was adjusted by 6/12ths to reflect the six full months employed in 2020 | | • | The PSU performance score had a threshold, target, and maximum level of performance based on STIP results for 2020, with performance at threshold, target, and maximum levels resulting in 50%, 100% and 200% of target payout, respectively | | • | The PSUs vested upon certification of the performance results by the Compensation Committee in February 2021 |
As detailed in the “Short-Term Incentives” section starting on page 54, the Compensation Committee exercised its discretion and approved a payout factor of 0.650 in respect of 2020 performance for all NEOs and officers, including Mr. Smith. The Compensation Committee and the independent membersrecognition of the PG&E Corporation Board applied a 110 percent individual performance modifierfact that the enhanced vegetation management program is being phased out in favor of other wildfire risk-reduction initiatives. Finally, the Committee changed the customer affordability target to Mr. Smith’s final payout. The Compensation Committee determined this individual performance modifier was appropriate based onalign the Board’s and the Compensation Committee’s evaluation of Mr. Smith’s performance in 2020, including his leadership during a transitional year for the companies. The 110 percent individual performance modifier alignsmetric more closely with the average modifier applied to other officers. After the proration described above, the below-target payout factor, and the impact of the individual performance modifier, Mr. Smith earned 35.8 percent of the target PSU award.
2021 Joint Proxy Statement | 61 |
| | | | | | | | | | | | | | | | | Threshold | Target | Maximum | | Performance Metric | Weight | (50%) | (100%) | (200%) | | Customer Operations | 35% | | | | | Customer satisfaction score | 18% | 73% | 75% | 79% | | Public Safety Power Shutoff (PSPS) Notification Accuracy | 18% | 98.00% | 99.00% | 99.90% | | Public Safety | 35% | | | | | System hardening effectiveness (risk miles) (Original) | 18% | 1,030 | 1,140 | 1,190 | System hardening effectiveness (risk miles) (Revised) | 18% | 985 | 1,090 | 1,138 | | Enhanced vegetation management effectiveness (risk miles) (Original) | 18% | 5,400 | 5,670 | 6,210 | Enhanced vegetation management effectiveness (risk miles) (Revised) | 18% | 3,600 | 3,780 | 4,140 | | Financial Stability | 30% | | | | | Greater affordability for customers (millions) (Original) | 15% | N/D | N/D | N/D | Greater affordability for customers (millions) (Revised) | 15% | N/D | N/D | N/D | | Relative Total Shareholder Return (TSR)(2) | 15% | 25th Percentile | 50th Percentile | 90th Percentile |
PG&E Corporation and the Utility provide retirement benefits to eligible employees, including the NEOs. Eligibility for different plans reflects factors including appointment date and employing entity. Tax-qualified pensions or similar plans, other tax-qualified defined contribution plans (e.g., 401(k) plans), and non-tax-qualified retirement plans for NEOs are common in our Pay Comparator Group, and the People and Compensation Committee believes these defined benefit and defined contribution plans offer significant recruiting and retention incentives. The different benefits that NEOs are eligible for are summarized below.below:
Benefit | Eligible | Key Features | | | | | 2023 Joint Proxy Statement | 58 |
| | | | | | | | | | Benefit | Eligible | Key Features | | PG&E Corporation Retirement Savings Plan | All NEOs | •Tax-qualified 401(k) plan • Maximum matching contribution of 75 cents for each dollar contributed, up toto: • 6% 6 percent of base salary for individuals eligible for the final average pay pension benefit • 8% 8 percent of base salary for individuals eligible for a cash balance pension benefit • Matching funds above IRS limits contributed to the NEO’s account in the PG&E Corporation 2005 Supplemental Retirement Savings Plan, a non-qualified deferred compensation plan
| | Retirement Plan | All NEOs | • Utility’s tax-qualified defined benefit plan • Takes the form of either a final average pay pension benefit or a cash balance benefit• During bankruptcy proceedings, lump sum payments of more than $5,000 were not permitted
| | PG&E Corporation Supplemental Executive Retirement Plan (SERP) | Simon Wells, Loduca | • Non-tax-qualified defined benefit pension plan • Frozen to new entrants after 2012
| | PG&E Corporation Defined Contribution Executive Supplemental Retirement Plan (DC-ESRP) | Lewis,Poppe, Glickman, Santos, Wright, Foster, Thomason, Welsch, Johnson, VeseySingh, and Cox | • Non-tax-qualified defined contribution pension plan • Covers all officers elected on or after January 1, 2013
|
Upon retirement, NEOs may also may be eligible for post-retirement health, welfare, insurance, and other benefits broadly similar to those provided to all employees. Additional details regarding the retirement programs and post-retirement benefits, and the value of pension benefits accumulated as of December 31, 2020,2022, for the NEOs can be found in the table entitled “Pension Benefits – 2020,”2022” on page 69, the table entitled “Non-qualified Deferred Compensation – 2020,”2022” on page 70, and the section entitled “Potential Payments – Resignation/ Retirement.”Retirement” on page 74. Perquisites NEOs generally receive limited perquisites that are comparable in value and scope to those provided to executive officers in the Pay Comparator Group. Perquisites are provided to reflect market norms and to enable the executives to effectively discharge their roles. The value of these services is taxable to the recipient and they generally include:
• | A partial subsidy for financial planning, partial reimbursement of certain health club fees, on-site parking including electric vehicle charging, executive health services, and de minimis value perquisites under a pre-approved policy; and | • | A lump-sum annual stipend in lieu of providing other market-typical perquisites. |
The PG&E Corporation and Utility principal executive officers also received safety-and security-based car transportation services in 2020.
In 2021, the ground transportationPeople and Compensation Committee reviewed the perquisites policies and practices with the help of its independent advisor. The following changes were approved to take effect in 2022: • The lump-sum annual cash stipend was discontinued effective January 1, 2022; • The de minimis perquisite policy, which enabled the Chief Human Resources Officer to approve low-value perquisites to non-CEO officers, was updateddiscontinued effective January 1, 2022; and • Subsidized financial planning services was discontinued effective March 1, 2022. Details of the perquisites and benefits made available to specify such transportation services are provided only whenour NEOs during 2022 can be found in the executive is traveling for business purposes.2021 Joint Proxy Statement | 62 |
footnotes to the Summary Compensation Table. General severance benefits are provided to the NEOs through the Officer Severance Policy and specific incentive plan award agreements and guidelines. The purpose of this policy is to: • | Attract and retain senior management by providing severance benefits that are part of a competitive total compensation package; | • | Provide consistent treatment for all terminated officers; | • | Minimize potential litigation costs in connection with terminations of employment by conditioning payments upon a general release of claims; and | • | Focus management on maximizing shareholder value and aligning interests, rather than being distracted by concerns about job security in a potential change-in-control situation. |
• Attract and retain senior management by providing severance benefits that are part of a competitive total compensation package; • Provide consistent treatment for all terminated officers; • Minimize potential litigation costs in connection with terminations of employment by conditioning payments upon a general release of claims; and • Focus management on maximizing shareholder value and aligning interests, rather than being distracted by concerns about job security in a potential change-in-control situation. Change-in-control benefits require a “double trigger” and are not payable based on a change-in-control event alone, which the People and Compensation Committee believes best reflects shareholder interests and aligns with typical market practices. Details of the policy are summarized below.Termination
Scenario | Eligible | Key Provisions | | | | | | | | | | Termination
Scenario | Eligible | Key Provisions | | Termination without cause | All NEOs | • | Cash severance of two-times (CEO) or one-times (other NEOs)the sum of base salary and STIP target | | • | Pro-rata vesting of PSUs | | • | Continued vesting of unvested RSUs for one year | | • | Continued vesting of stock options for one year, with an exercise period equal to the lesser of one year or the remaining term of the options | | • | Limited COBRA benefits and outplacement services |
| | | | | | | 2023 Joint Proxy Statement | 59 |
| | | | | | | | | | | | Termination
Scenario | Eligible | Key Provisions | | Termination for cause or resignation when not retirement eligible | All NEOs(1) | Termination for cause or resignation when not retirement eligible: | | • | Forfeits all unvested PSUs, RSUs, and stock options | | • | Forfeits any unpaid dividends associated with long-term incentive awards | | | | Termination following a Change in Control | Smith, Simon, Johnson, Vesey, Wells, LoducaAll NEOs (except D. Thomason) | • | Cash severance of three-times (CEO) or two-times (other NEOs) the sum of base salary and STIP target | | • | LTIP award agreements detail treatment that accelerate vesting of all awards on a change of control (CIC) if either (1) the officer is severed in connection with the CIC, or (2) the award is not continued, assumed, or substituted | | | Lewis, Foster, Thomason, Welsch | • | General severance benefits only (i.e. those set out above, not related to a change in control) | • | LTIP award agreements detail treatment that accelerate vesting of all awards on a CIC if either (1) the officer is severed in connection with the CIC, or (2) the award is not continued, assumed, or substituted |
Notes. | (1) | Messrs. Simon and Welsch are eligible for retirement. |
The Golden Parachute Restriction Policy requires shareholder approval of certain defined executive severance payments provided in connection with a change in control of PG&E Corporation, to the extent that those payments exceed 2.99 times the sum of a covered officer’s base salary and target short-term incentive award. The Officer Severance Policy also permits reduction and repayment of severance benefits from certain officers, with certain triggers. Specifically, the Boards of Directors of PG&E Corporation and the Utility will have: • | a right to cancel, reduce, or require forfeiture of severance payments or benefits from (1) executive officers of either company in the event of a felony conviction of either company related to public health and safety or financial misconduct by either company following its July 1, 2020 emergence from Chapter 11 (Company Conviction), provided that an affected executive officer was serving as an executive officer of the convicted company at the time of the conduct leading to the Company Conviction; or (2) either company’s CEO or CFO if that company is required to restate its financial statements due to that company’s material non-compliance with financial reporting requirements as a result of misconduct, provided that the individual was serving as CEO or CFO during the period covered by the restatement; and | • | a right to recoup or require reimbursement or repayment of severance rights, payments, and benefits from executive officers in the event such executive officers engaged in misconduct that materially contributed to some of the actions or omissions on which a Company Conviction is based. |
2021 Joint Proxy Statement | 63 |
• A right to cancel, reduce, or require forfeiture of severance payments or benefits from (1) executive officers of either company in the event of a felony conviction of either company related to public health and safety or financial misconduct by either company following its July 1, 2020 emergence from Chapter 11 (Company Conviction), provided that an affected executive officer was serving as an executive officer of the convicted company at the time of the conduct leading to the Company Conviction; or (2) either company’s CEO or CFO if that company is required to restate its financial statements due to that company’s material non-compliance with financial reporting requirements as a result of misconduct, provided that the individual was serving as CEO or CFO during the period covered by the restatement; and • A right to recoup or require reimbursement or repayment of severance rights, payments, and benefits from executive officers in the event such executive officers engaged in misconduct that materially contributed to some of the actions or omissions on which a Company Conviction is based. Additional details regarding severance benefits can be found in the sections entitled “Potential Payments—Termination Without Cause” beginning on page 83,75, and “Potential Payments—Severance in Connection with Change in Control” beginning on page 84.76.2021 | | | | 2023 Compensation Structure |
Following emergence,
In the first quarter 2023, the People and the appointment of our restructured Board, the Compensation Committee focusedsubmitted the 2023 compensation program for approval under AB 1054. The plans continue to our focus on areas that would begin to shape our 2021 compensation programs. This included the attraction, employment, and compensation of the Corporation’s new CEO and the metrics and goals for our 2021 short- and long-term incentive programs.Chief Executive Officer Appointment
In November 2020, Ms. Poppe was appointed CEO of PG&E Corporation effective January 4, 2021. As disclosed in our November 18, 2021 Form 8-K filingwith the SEC, the independent members of the Corporation Board approved an annual compensation arrangement in association with her role as CEO, as well as one-time make-whole and inducement awards to secure her employment.
Annual Compensation
The key aspects of Ms. Poppe’s initial annual compensation, set out in an offer letter that also provides for a five-year term with automatic annual renewals, are as follows:
Compensation
Element | Details | Base Salary | • | $1,350,000 annual base salary | Short-Term
Incentive | • | 130% target opportunity | • | Subject to the metrics described in the “Incentive Compensation” section below | Long-Term
Incentive | • | Target award value of $9,250,000 for 2021 | • | Made according to the terms of the annual LTIP design approved by the Compensation Committee |
Ms. Poppe will be eligible under our existing perquisite and benefit programs.
• | Perquisites will be in line with those provided to the other executive officers, including a lump-sum stipend of $35,000 in lieu of providing certain market-typical benefits. | • | One-time benefits linked to her appointment and relocation including up to six family roundtrips to the Corporation’s headquarters, $26,202 in costs related to specific limited relocation activities, and reimbursement of legal expenses up to $25,000. | • | Post-retirement benefits will be provided under the PG&E Corporation Retirement Savings Plan (a tax-qualified 401(k) plan), the Pacific Gas and Electric Company Retirement Plan, and the PG&E Corporation Defined-Contribution Executive Supplemental Retirement Plan. | • | Severance benefits will be provided for under the Officer Severance Policy. |
2021 Joint Proxy Statement | 64 |
One-Time Compensation
In addition, to secure Ms. Poppe’s appointment, the independent members of the PG&E Corporation Board approved two one-time awards intended to compensate her for compensation that was forfeited with her prior employer. The Compensation Committee has determined that such payments are in line with market standards and believes they were appropriately structured to protect shareholder interests through the application of clawback provisions and the ability to reduce payments if certain awards were not in fact forfeited on joining PG&E Corporation.
Award | Material Details | Design Considerations | $31,924,949
RSU award | • RSUs vest in two equal tranches on the first and second anniversaries of grant
• Intended to replace certain long-term equity awards with Ms. Poppe’s former employer
• Award will be reduced to the extent the awards being replaced are ultimately received from her former employer
| • Approved values heavily informed by compensation forfeited to join the Corporation
• 83% granted in the form of equity, providing immediate alignment with shareholders’ interests with vesting over two years
• Awards include the ability to reduce or clawback depending on the circumstances
| $6,600,000 cash payment | • Intended to replace her 2020 annual bonus from her former employer, one of the long-term stock awards, and certain unvested nonqualified deferred compensation benefits, and to assist with relocation and expenses
• Award is subject to clawback provisions in the event Ms. Poppe resigns, other than for good reason (as defined in the Officer Severance Policy), or is terminated for cause within 12 months of her start date
| |
Incentive Design
For 2021, the Compensation Committee has maintained a broadly consistent incentive compensation structure, with some changes to performance metrics and weightings to reflect priorities for the year ahead. These changes reinforce important areas of operational focus, including increased emphasis on workforce safety, while maintaining alignment with the criteria of AB 1054 and our POR OII commitments. The Compensation Committee followed a rigorous process while reviewing metrics and performance goals, including thoughtful deliberations with the Corporation’s CEO, the companies’ Chief Risk Officer, and the companies’ Chief Safety Officer, and a review of safety-related measures with the Safety and Nuclear Oversight Committees.
Short-Term Incentive Plan For 2021, we have eliminated2023, the individual performance modifierdesign is largely consistent with 2022, maintaining a sixty-five percent weight of safety and WMP metrics with a continued to place greater emphasis on the success of the team rather than the individual. To better align with market, the maximum payout under the STIP will be capped at 200 percent of target.In respect of the company score, the weightings associated with our operational performance and reliability and with workforce safety performance areas will increase, reflecting our continued focus on outcome-oriented and risk reduction metrics that prioritize the service provided to our customers and the safety of our workforce.metrics. Minor changes have been made to metric definitions, with the inclusion of new metrics in areas relating to wire-down events, average speed of answer for incoming calls regarding emergencies,definitions. The People and serious injuries and fatalities events, investigations, and corrective actions.
2021 Joint Proxy Statement | 65 |
Long-Term Incentive Plan
For 2021, the Compensation Committee approved changeswill have the ability to approve individual performance adjustments provided they do not result in an outcome that exceeds the metrics that resulted in incorporating TSR performance as a weighted metric rather than a modifier, which reduces theoverall plan maximum opportunity available under the plan from 250 percent of target (200 percent maximum score times 125 percent maximum modifier) to 200 percent of target (no modifier). This better alignstarget.
Long-Term Incentive Plan Annual equity grants to executive officers (including NEOs) continue to be 100 percent PSUs. Similar to the plan design with market. Minor changes have been made, including adding newunder the short-term incentive program, the weighting of safety metrics to assess our successis the focus. The metrics used in reducing wildfire risk based on our enhanced vegetation management work,2022 will be retained except for Enhanced Vegetation Management and Greater Affordability for Customers, and a metric related to achieving affordability for customers through efficiencynew Electric Corrective Maintenance in operations.For 2021,HFTA will be added under the Compensation Committee also reintroduced RSUs in the LTIP for officers not subject to AB 1054 to realign the plan to competitive market practices and promote enhanced employee retention.
"Safety" category. The PG&E Corporation Equity Grant Date Policy, as last amended in September 2017, generally provides that annual LTIP awards, if any, are granted once per year on March 1 (or if that day is not a business day, then on the following business day). The PG&E Corporation Board or the People and Compensation Committee may determine a different grant date if appropriate or necessary. The Companies retain discretion to grant date for non-annual equityLTIP awards to employeesother than annual awards (such as for newly hired or newly promoted officers or awards made for retention, recognition or other purposes) is the later of (1) the date that the non-annual award is approved by the independent members of the PG&E Corporation or Utility Board, the Compensation Committee, or the PG&E Corporation CEO, as applicable, (2) the effective date of the LTIP award recipient’s employment, promotion, or recognition, or (3) the date otherwise specified by the applicable Board, the Compensation Committee, or the PG&E Corporation CEO.like purposes. If the grant date of any non-annual LTIP award would occur during a trading blackout period, as defined under the companies’ Insider Trading Policy, then the actual grant date will be the first business day after the trading blackout period ends.
| | | | | | | 2023 Joint Proxy Statement | 60 |
Use of Non-GAAP Financial Metrics NEOs receive incentive awards that are subject to earnings metrics that are considered “Non-GAAP financial measures” under SEC rules and regulations. See “Exhibit A,” starting on page 67, explains how62, for a reconciliation of these measures are calculated from our audited financial statements.to GAAP measures. Tax and Accounting Considerations The People and Compensation Committee sets NEO compensation in accordance with our compensation philosophy and continues to believe that attracting, retaining, and motivating our employees with a compensation program that supports long-term value creation is in the best interests of our shareholders. In reaching decisions on executive compensation, the People and Compensation Committee considers the tax and accounting consequences. With the passage of the Tax Cuts and Jobs Act of 2017, Section 162(m) of the Internal Revenue Code no longer permitsdoes not permit companies to deduct certain qualified performance-based executive compensation. As a result, in establishing compensation, the People and Compensation Committee no longer considered the tax deductibility limitations imposed by Section 162(m). Despite the new limits on the deductibility of performance-based compensation, the People and Compensation Committee continues to believe that a significant portion of NEO compensation should be tied to company performance.
2021 | | | | | | | 2023 Joint Proxy Statement | 66 |
Reconciliation of PG&E Corporation’s Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”)GAAP to Earnings from Operations.Non-GAAP Core Earnings. For the year ended December 31, 2020.| (in millions, except per share amounts) | Earnings | | Per Share Amounts (Diluted) | | PG&E Corporation Earnings on a GAAP basis | $ (1,318) | | $(1.05) | | Items Impacting Comparability:(1) | | | | | Amortization of wildfire fund contribution(2) | 297 | | 0.24 | | Investigation remedies(3) | 223 | | 0.18 | | Bankruptcy and legal costs(4) | 2,651 | | 2.11 | | 2019-2020 Wildfire-related costs, net of insurance(5) | 213 | | 0.17 | | Prior period net regulatory recoveries(6) | (46) | | (0.04) | | PG&E Corporation Earnings from Operations(7) | $ 2,020 | | $1.61 |
(1) | “Items impacting comparability” represent items that management does not consider part of the normal course of operations and that affect comparability of financial results between periods. Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders as reported in accordance with GAAP. All amounts presented in the table above are tax adjusted at PG&E Corporation’s statutory tax rate of 27.98 percent for 2020, except for certain costs that are not tax deductible, as identified in the following footnotes.2022. | | | | | | | | | | | | | | | | | | | | | | | Earnings | | Earnings per Common Share (Diluted) | | (in millions, except per share amounts) | | 2022 | | | 2022 | | | PG&E Corporation’s Earnings (Loss) on a GAAP basis | | $ | 1,800 | | | | $ | 0.84 | | | | Non-core items: (1) | | | | | | | | Amortization of Wildfire Fund contribution (2) | | $ | 344 | | | | $ | 0.16 | | | | Wildfire-related costs, net of insurance (3) | | $ | 254 | | | | $ | 0.12 | | | | Investigation remedies (4) | | $ | 93 | | | | $ | 0.04 | | | | Bankruptcy and legal costs (5) | | $ | 216 | | | | $ | 0.1 | | | | Strategic repositioning costs (6) | | $ | 65 | | | | $ | — | | | | Fire Victim Trust tax benefit net of securitization (7) | | $ | (418) | | | | $ | (0.20) | | | | Prior period net regulatory impact (8) | | $ | (11) | | | | $ | (0.01) | | | | PG&E Corporation’s Non-GAAP Core Earnings (9) | | $ | 2,343 | | | $ | 1.10 | | |
All amounts presented in the table above and footnotes below are tax adjusted at PG&E Corporation’s statutory tax rate of 27.98 percent for 2022 and 2021, except for certain costs that are not tax deductible. Earnings per Common Share is calculated based on diluted shares, except as noted. Amounts may not sum due to rounding. (1) “Non-core items” include items that management does not consider representative of ongoing earnings and affect comparability of financial results between periods, consisting of the items listed in the table above. See Exhibit F: Non-GAAP Financial Measures. (2) The Utility recorded costs of $477 million (before the tax impact of $133 million) during the twelve months ended December 31, 2022 associated with the amortization of the Wildfire Fund asset and accretion of the related Wildfire Fund liability. (3) Includes costs associated with the 2019 Kincade fire, 2020 Zogg fire, and 2021 Dixie fire, net of insurance, as shown below. | | | | | | | | | | (in millions) | | Twelve Months December 31, 2022 | (2)2019 Kincade fire third-party claims | The Utility recorded costs of $413 million (before the tax impact of $116 million) associated with the amortization of wildfire fund contributions related to Assembly Bill 1054. | $ | 225 | | | 2019 Kincade fire-related costs | | 30 | (3)2019 Kincade fire-related legal settlements | The Utility recorded | 20 | | 2020 Zogg fire third-party claims | | 25 | | 2020 Zogg fire-related costs | | 25 | | 2020 Zogg fire-related insurance recoveries | | (33) | | 2021 Dixie fire-related legal settlements | | 43 | Wildfire-related costs, net of $296 million (before the tax impactinsurance (pre-tax) | | $ | 334 | | | Tax impacts | | (80) | Wildfire-related costs, net of $73 million) associated with investigation remedies. This includes $231 million (before the tax impact of $62 million) related to the Order Instituting Investigation into the 2017 Northern California Wildfires and the 2018 Camp Fire (Wildfire OII)insurance (post-tax) | | $ | 254 | |
4) Includes costs associated with the settlement agreement with the Safety and Enforcement Division’s investigation into the 2020 Zogg fire, restoration and rebuild costs for the town of Paradise, the CPUC’s OII into the 2017 Northern California Wildfires and 2018 Camp Fire, the settlement agreement with the Safety and Enforcement Division’s investigation into the 2019 Kincade fire, and the system enhancements related to the locate and mark OII, as shown below. | | | | | | | | | | (in millions) | | Twelve Months Ended December 31, 2022 | 2020 Zogg fire settlement as modified by the Decision Different dated April 20, 2020 ($ | | $ | 10 million of Wildfire OII system enhancement costs are not tax deductible). The Utility also incurred | | Paradise restoration and rebuild costs of $36 million (before the tax impact of $10 million) associated with the town of Paradise (2018 Camp fire). The Utility also recorded costs of $29 million (before the tax impact of $1 million) for system enhancements related to the Locate and Mark OII ($25 million of Locate and Mark OII system enhancement costs are not tax deductible). |
(in millions, pre-tax) | | Twelve Months Ended
December 31, 2020
3 | | Wildfire OII disallowance and system enhancements | | $ 23119 | Paradise restoration and rebuild2019 Kincade fire settlement | | 3685 | Locate and Markmark OII system enhancements | | 293 | | Investigation remedies (pre-tax) | | $ 296 | 120 | | | Tax impacts | | (27) | | Investigation remedies (post-tax) | | $ | 93 | |
(5) Includes bankruptcy and legal costs associated with PG&E Corporation’s and the Utility’s Chapter 11 filing, including legal and other costs, exit financing costs, and securities litigation costs, as shown below.
(4) | PG&E Corporation and the Utility recorded costs of $2.8 billion (before the tax impact of $125 million) associated with bankruptcy and legal costs. This includes $1.7 billion (before the tax impact of $41 million) related to exit financing costs ($1.5 billion of exit financing costs are not tax deductible). Also, the Utility recorded a $619 million reduction to the deferred tax asset related to the value of PG&E Corporation’s common stock transferred to the Fire Victim Trust. PG&E Corporation and the Utility also incurred legal | | | | | | 2023 Joint Proxy Statement | 62 |
| | | | | | | | | | (in millions) | | Twelve Months Ended December 31, 2022 | Legal and other costs of $486 million (before the tax impact of $84 million); $184 million of | | $ | 75 | | | Exit financing | | 81 | | Securities litigation costs | | 145 | | Bankruptcy and legal costs (pre-tax) | | $ | 301 | | | Tax impacts | | (85) | Bankruptcy and otherlegal costs were treated as not tax deductible.(post-tax) | | $ | 216 | |
(6) The Utility recorded one-time costs related to repositioning PG&E Corporation’s and the Utility’s operating model, including their workforce, and the potential sale of a minority interest in Pacific Generation LLC. | | | | | | | | | (in millions, pre-tax)millions) | | Twelve Months Ended December 31, 2020 2022 | Exit financingOperating model | | $ 1,672 | 90 | | | Pacific Generation LLC minority interest sale | | — | | Strategic repositioning costs (pre-tax) | | $ | 90 | | | Tax impacts | | 25 | | Strategic repositioning costs (post-tax) | | $ | 65 | |
(7) Includes any earnings-impacting investment losses, net of gains, associated with investments related to the upfront contributions to the Customer Credit Trust, the charge related to the establishment of the SB 901 securitization regulatory asset and the SB 901 securitization regulatory liability associated with revenue credits funded by Net Operating Loss monetization, and tax benefits related to the Fire Victim Trust’s sale of PG&E Corporation common stock. | | | | | | | | | | (in millions) | | Twelve Months Ended December 31, 2022 | | Rate neutral securitization inception charge | | $ | 608 | | | Losses, net of gains related to Customer Credit Trust | | 19 | Fire Victim Trust tax valuationbenefit net of securitization (pre-tax) | | 619$ | 627 | | Legal and other costsTax impacts | | 486(175) | Bankruptcy and legal costsTax benefits from Fire Victim Trust share sales | | $ 2,776(870) |
(5) | The Utility incurred costs,Fire Victim Trust tax benefit net of probable insurance recoveries, of $296 million (before the tax impact of $84 million) associated with 2019-2020 wildfires. This includes accrued charges for third-party claims of $625 million (before the tax impact of $175 million) related to Kincade fire, and $275 million (before the tax impact of $77 million) related to Zogg fire. The Utility also incurred costs of $35 million (before the tax impact of $10 million) for clean-up and repair costs related to Kincade fire. In addition, the Utility incurred legal and other costs of $6 million (before the tax impact of $2 million) related to Kincade fire, as well as $4 million (before the tax impact of $1 million) related to Zogg fire. These costs were partially offset by probable insurance recoveries of $430 million (before the tax impact of $120 million) related to Kincade fire, as well as $219 million (before the tax impact of $61 million) related to Zogg fire.securitization (post-tax) | | $ | (418) | |
(8) Includes adjustments associated with the recovery of capital expenditures from 2011 through 2014 above amounts adopted in the 2011 GT&S rate case per the CPUC decision dated July 14, 2022, partially offset by adjustments for the TO18 and TO19 ROE impact as a result of the FERC order dated March 17, 2022, which established a base ROE of 9.26 percent for the TO18 period, plus the approved CAISO incentive adder of 0.5 percent, for a total ROE of 9.76 percent. | | | | | | | | | (in millions, pre-tax)millions) | | Twelve Months Ended December 31, 2020 2022 | 2019 Kincade fire-related costs,2011-2014 GT&S capital audit | | $ | (78) | | | TO18 and TO19 ROE impact | | 63 | Prior period net of insurance:regulatory impact (pre-tax) | | $ | (16) | | | Tax impacts | | 5 | | Prior period net regulatory impact (post-tax) | | $ | (11) | |
Undefined, capitalized terms have the meanings set forth in the PG&E Corporation and the Utility’s joint annual report on Form 10-K for the year ended December 31, 2022. “Non-GAAP core earnings” is a non-GAAP financial measure and is calculated as income available for common shareholders less non-core items. “Non-core items” include items that management does not consider representative of ongoing earnings and affect comparability of financial results between periods, consisting of the items listed in this Exhibit A. “Non-GAAP core earnings per share” is a non-GAAP financial measure and is calculated as non-GAAP core earnings divided by common shares outstanding (taken on a basic basis in the event of a GAAP loss and a diluted basis in the event of a GAAP gain). PG&E Corporation and the Utility use non-GAAP core earnings and non-GAAP core earnings per share to understand and compare operating results across reporting periods for various purposes including internal budgeting and forecasting, short- and long-term operating planning, and employee incentive compensation. PG&E Corporation and the Utility believe that non-GAAP core earnings and non-GAAP core EPS provide additional insight into the underlying trends of the business, allowing for a better comparison against historical results and expectations for future performance. Non-GAAP core earnings and non-GAAP core earnings per share are not substitutes or alternatives for GAAP measures such as consolidated income available for common shareholders and may not be comparable to similarly titled measures used by other companies.
2021 | | | | | | | 2023 Joint Proxy Statement | 6763 |
EXECUTIVE OFFICER COMPENSATION | | | | Summary Compensation Table – 2022 |
(in millions, pre-tax) | | Twelve Months Ended
December 31, 2020
| Third-party claims | | $ 625 | Utility clean-up and repairs | | 35 | Legal and other costs | | 6 | Insurance recoveries | | (430) | 2020 Zogg fire-related costs, net of insurance: | | | Third-party claims | | 275 | Legal and other costs | | 4 | Insurance recoveries | | (219) | Total 2019-2020 Wildfire-related costs, net of insurance | | $ 296 |
(6) | The Utility recorded net revenue of $64 million (before the tax impact of $18 million) associated with prior period net regulatory recoveries. This includes $31 million (before the tax impact of $9 million) for allowance for funds used during construction (AFUDC) capital structure impact on 2019 revenues. The Utility also incurred $70 million (before the tax impact of $20 million) for the impact of the Transmission Owner (TO) 20 settlement on 2019 revenues and the TO18 FERC order on 2017, 2018, and 2019 revenues. Also, as a result of the 2011 Gas Transmission and Storage (GT&S) capital audit, the Utility recorded revenues of $103 million (before the tax impact of $29 million) related to the recovery of capital expenditures from 2011 through 2014 above amounts adopted in the 2011 GT&S rate case. |
(in millions, pre-tax) | | Twelve Months Ended
December 31, 2020
| AFUDC capital structure impact | | $ (31) | TO proceedings impact | | 70 | 2011 GT&S capital audit | | (103) | Prior period net regulatory recoveries | | $ (64) |
(7) | “Earnings from operations” is a non-GAAP financial measure and is calculated as income available for common shareholders less items impacting comparability as described in Note (1) above. PG&E Corporation uses earnings from operations to understand and compare operating results across reporting periods for various purposes, including internal budgeting and forecasting, short- and long-term operating plans, and employee incentive compensation. PG&E Corporation believes that non-GAAP earnings from operations provide additional insight into the underlying trends of the business allowing for a better comparison against historical results and expectations for future performance. Earnings from operations is not a substitute or alternative for GAAP measures such as consolidated income available for common shareholders and may not be comparable to similarly titled measures used by other companies. |
2021 Joint Proxy Statement | 68 |
EXECUTIVE OFFICER COMPENSATION INFORMATION
Summary Compensation Table – 2020
This table summarizes the principal components of compensation paid or granted during 20202022 (including cash incentives earned for corporate performance in 20202022 but paid in 2021)2023). This table also includes information disclosed in the 2021 Joint Proxy Statement and the 2019 Form 10-K/A and 2019 Joint Proxy Statement for compensation paid or granted to certain officers during 20192020 and 2018,2021, respectively. Name and
Principal Position | | Year | | Salary
($)(1) | | Bonus
($) | | Stock
Awards
($)(2) | | Option
Awards
($)(3) | | Non-Equity
Incentive
Plan
Compensation
($)(4) | | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(5) | | All Other
Compensation
($)(6) | | Total
($) | William L. Smith(a)
Interim Chief Executive Officer and President, PG&E Corporation | | 2020 | | 755,682 | | 0 | | 5,105,000 | | 0 | | 0 | | 21,354 | | 292,179 | | 6,174,215 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Michael A. Lewis(b)
Interim President, Pacific Gas and Electric Company | | 2020 | | 973,069 | | 0 | | 699,993 | | 0 | | 223,555 | | 22,011 | | 163,793 | | 2,082,421 | | | 2019 | | 474,855 | | 125,000 | | 0 | | 0 | | 0 | | 15,603 | | 81,785 | | 697,243 | | | | | | | | | | | | | | | | | | | | Christopher A. Foster(c)
Vice President and Interim Chief Financial Officer, PG&E Corporation | | 2020 | | 438,095 | | 0 | | 300,001 | | 0 | | 108,426 | | 166,195 | | 67,636 | | 1,080,353 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | David S. Thomason
Vice President, Chief Financial Officer and Controller, Pacific Gas and Electric Company | | 2020 | | 353,853 | | 0 | | 700,002 | | 0 | | 114,441 | | 303,438 | | 55,516 | | 1,527,251 | | | 2019 | | 331,250 | | 0 | | 0 | | 0 | | 0 | | 275,136 | | 52,973 | | 659,359 | | | 2018 | | 323,718 | | 0 | | 260,039 | | 65,001 | | 0 | | 0 | | 59,900 | | 708,658 | John R. Simon(d)
Executive Vice President, General Counsel, and Chief Ethics & Compliance Officer, PG&E Corporation | | 2020 | | 768,786 | | 0 | | 3,062,499 | | 0 | | 439,400 | | 790,616 | | 67,543 | | 5,128,845 | | | 2019 | | 749,031 | | 0 | | 0 | | 0 | | 0 | | 728,771 | | 69,696 | | 1,547,499 | | | 2018 | | 599,000 | | 0 | | 1,800,090 | | 450,007 | | 0 | | 203,765 | | 71,766 | | 3,124,628 | James M. Welsch
Senior Vice President, Generation and Chief Nuclear Officer, Pacific Gas and Electric Company | | 2020 | | 606,437 | | 0 | | 1,137,995 | | 0 | | 245,495 | | 283,136 | | 86,127 | | 2,359,190 | | | 2019 | | 533,181 | | 0 | | 0 | | 0 | | 143,563 | | 298,748 | | 95,257 | | 1,070,749 | | | | | | | | | | | | | | | | | | | | William D. Johnson(e)
Former Chief Executive Officer and President, PG&E Corporation | | 2020 | | 1,532,963 | | 0 | | 0 | | 0 | | 0 | | 23,238 | | 199,542 | | 1,755,742 | | | 2019 | | 1,657,609 | | 3,000,000 | | 2,333,358 | | 11,102,001 | | 0 | | 22,400 | | 414,474 | | 18,529,842 | | | | | | | | | | | | | | | | | | | | Andrew M. Vesey(f)
Former Chief Executive Officer and President, Pacific Gas and Electric Company | | 2020 | | 666,596 | | 0 | | 0 | | 0 | | 0 | | 24,480 | | 2,939,494 | | 3,630,569 | | | 2019 | | 371,212 | | 1,000,000 | | 833,558 | | 0 | | 0 | | 21,159 | | 147,842(7) | | 2,373,771 | | | | | | | | | | | | | | | | | | | | Jason P. Wells(g)
Former Executive Vice President and Chief Financial Officer, PG&E Corporation | | 2020 | | 722,042 | | 0 | | 3,062,499 | | 0 | | 0 | | 95,227 | | 54,491 | | 3,934,259 | | | 2019 | | 630,000 | | 0 | | 0 | | 0 | | 0 | | 525,086 | | 60,866 | | 1,215,952 | | | 2018 | | 625,000 | | 0 | | 2,000,122 | | 500,001 | | 0 | | 0 | | 72,151 | | 3,197,274 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and
Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total
($) | Patricia K. Poppe
CEO, PG&E Corporation | 2022 | 1,391,667 | 0 | 10,069,628 | 0 | 2,207,520 | 13,269 | 438,509 | 14,120,593 | | 2021 | 1,344,643 | 6,600,000 | 41,175,002 | 0 | 1,487,578 | 18,198 | 573,050 | 51,198,471 | | | | | | | | | | Jason M. Glickman
EVP, Engineering, Planning and Strategy, Pacific Gas and Electric Company | 2022 | 712,500 | 0 | 1,854,956 | 0 | 630,392 | 8,826 | 112,784 | 3,319,458 | | 2021 | 450,000 | 500,000 | 1,750,021 | 0 | 287,213 | 13,373 | 74,255 | 3,074,861 | | | | | | | | | | Marlene M. Santos EVP and Chief Customer Officer, Pacific Gas and Electric Company | 2022 | 866,667 | 0 | 2,755,918 | 0 | 993,034 | 16,727 | 155,677 | 4,788,022 | | 2021 | 657,609 | 900,000 | 5,113,471 | 0 | 503,663 | 22,292 | 287,052 | 7,484,086 | | | | | | | | | | Adam L. Wright (7) EVP, Operations and COO, Pacific Gas and Electric Company | 2022 | 869,191 | 0 | 2,755,918 | 0 | 911,040 | 11,992 | 161,777 | 4,709,917 | | 2021 | 762,596 | 500,000 | 4,200,016 | 0 | 579,212 | 13,695 | 452,641 | 6,508,160 | | | | | | | | | | Christopher A. Foster (8) EVP and CFO, PG&E Corporation | 2022 | 648,333 | 0 | 1,854,956 | 0 | 454,352 | 0 | 100,913 | 3,058,554 | | 2021 | 627,355 | 0 | 1,330,083 | 0 | 375,723 | 42,320 | 98,653 | 2,474,133 | | 2020 | 438,095 | 0 | 300,001 | 0 | 145,287(a) | 166,195 | 67,636 | 1,117,214 | David S. Thomason (9) VP, CFO and Controller, Pacific Gas and Electric Company | 2022 | 385,975 | 0 | 424,024 | 0 | 202,868 | 0 | 61,633 | 1,074,499 | | 2021 | 381,858 | 0 | 400,051 | 0 | 200,906 | 28,373 | 65,050 | 1,076,238 | | 2020 | 353,853 | 0 | 700,002 | 0 | 114,441 | 303,438 | 55,516 | 1,527,251 | John R. Simon EVP, General Counsel, and Chief Ethics & Compliance Officer, PG&E Corporation | 2022 | 812,248 | 0 | 1,854,956 | 0 | 725,760 | 11,337 | 36,605 | 3,440,906 | | 2021 | 841,039 | 0 | 1,750,023 | 0 | 488,657 | 556,326 | 63,945 | 3,699,990 | | 2020 | 768,786 | 0 | 3,062,499 | 0 | 439,400 | 790,616 | 67,543 | 5,128,845 | Sumeet Singh EVP, Chief Risk and Chief Safety Officer, PG&E Corporation and Pacific Gas and Electric Company | 2022 | 675,000 | 0 | 1,854,956 | 0 | 597,213 | 3,251 | 96,811 | 3,227,232 | | 2021 | 502,000 | 0 | 715,045 | 0 | 273,320 | 48,649 | 80,082 | 1,619,095 | | | | | | | | | | Julius Cox EVP, People, Shared Services and Supply Chain, Pacific Gas and Electric Company | 2022 | 639,167 | 0 | 1,324,950 | 0 | 559,910 | 13,095 | 166,267 | 2,703,389 | | | | | | | | | | | | | | | | | | |
(a) Due to an administrative error, this number was incorrectly reported as 108,426 in our 2022 and 2021 proxy. (1) Includes payments for accrued vacation. (2) Represents the grant date fair value of PSUs and RSUs measured in accordance with FASB ASC Topic 718, without considering an estimate of forfeitures related to service-based vesting. For PSUs using safety and affordability measures, and for RSUs, grant date fair value is measured using the closing price of PG&E Corporation common stock on the grant date. Assumptions made in valuation of reported performance shares with a relative TSR measure, including adjustments to values reported in 2022 for 2021 TSR PSU awards to account for certain one-time events, are described in footnote 4 to the table entitled “Grants of Plan-Based Awards in 2022” on page 65.If the highest level of performance conditions were achieved, the estimated maximum grant date value of PSUs granted in 2022 would be: Ms. Poppe $20,139,257, Mr. Glickman $3,709,912, Ms. Santos $5,511,835, Mr. Wright $5,511,835, Mr. Foster $3,709,912, Mr. Thomason $848,047, Mr. Simon $3,709,912, Mr. Singh $3,709,912, and Mr. Cox $2,649,900. (3) No stock options were granted in 2022.
2021 | | | | | | | 2023 Joint Proxy Statement | 69 |
Summary Compensation Table – 2020(Continued)
Name and Principal Position | | Year | | Salary ($)(1) | | Bonus ($) | | Stock Awards ($)(2) | | Option Awards ($)(3) | | Non-Equity Incentive Plan Compensation ($)(4) | | Change in Pension Value and Nonqualified Deferred
Compensation Earnings ($)(5) | | All Other
Compensation ($)(6) | | Total ($) | | Janet C. Loduca(h) | | 2020 | | 583,924 | | 0 | | 1,200,004 | | 0 | | 261,189 | | 510,881 | | 1,150,910 | | 3,706,908 | | Former Senior Vice President and General Counsel, PG&E Corporation and Pacific Gas and Electric Company | | 2019 | | 636,995 | | 0 | | 0 | | 0 | | 0 | | 526,675 | | 58,430 | | 1,222,101 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(a) | Effective June 30, 2020, Mr. Smith became Interim Chief Executive Officer and President of PG&E Corporation. | | | (b) | Mr. Lewis served as Senior Vice President, Electric Operations of Pacific Gas and Electric Company until July 31, 2020. Effective August 1, 2020, Mr. Lewis became Interim President of Pacific Gas and Electric Company. | | | (c) | Mr. Foster served as Vice President, Investor Relations of PG&E Corporation until March 8, 2020. Effective March 9, 2020, Mr. Foster became Vice President, Treasury & Investor Relations of PG&E Corporation. Effective September 26, 2020, Mr. Foster became Vice President and Interim Chief Financial Officer of PG&E Corporation. | | | (d) | Mr. Simon served as Executive Vice President, Law, Strategy & Policy of PG&E Corporation until August 14, 2020. Effective August 15, 2020, Mr. Simon became Executive Vice President, General Counsel, and Chief Ethics & Compliance Officer of PG&E Corporation. | | | (e) | Effective July 1, 2020, Mr. Johnson retired from PG&E Corporation. | | | (f) | Effective August 4, 2020, Mr. Vesey separated from the Utility. | | | (g) | Effective September 26, 2020, Mr. Wells resigned from PG&E Corporation. | | | (h) | Effective August 16, 2020, Ms. Loduca separated from the companies. | | | (1) | Includes payments for accrued vacation. | | | (2) | Represents the grant date fair value of performance shares and RSUs measured in accordance with FASB ASC Topic 718, without considering an estimate of forfeitures related to service-based vesting. For performance shares using safety and affordability measures, and for RSUs, grant date fair value is measured using the closing price of PG&E Corporation common stock on the grant date. If the highest level of performance conditions were achieved, the estimated maximum grant date value of performance shares granted in 2020 would be: Mr. Smith $8,750,008, Mr. Lewis $1,749,983, Mr. Foster $750,007, Mr. Thomason $1,750,011, Mr. Simon $4,375,008, Mr. Welsch $2,844,991, Mr. Johnson $0, Mr. Vesey $0, Mr. Wells $4,375,008, and Ms. Loduca $3,000,011. For Mr. Smith, also includes the value of RSUs he received as a non-employee director in 2019, as further described in footnote 2(ii) to the “2020 Director Compensation” table on page 31, and the section entitled “Non-Employee Director Stock-Based Compensation” on page 30. | | | (3) | Represents the grant date fair value of stock options based on a Black-Scholes American Call valuation model. No stock options were granted in 2020. | | | (4) | Amounts represent payments received or deferred in 2021, 2020, and 2019 for achievement of corporate and organizational objectives in 2020, 2019, and 2018, respectively, under the STIP. | | | (5) | Amounts reported for 2020 consist of (i) the change in pension value during 2020 for all NEOs and (ii) the above-market earnings on compensation deferred into the PG&E Corporation Supplemental Retirement Savings Plan and invested in the AA Utility Bond Fund for Mr. Simon only ($15,569). The AA Utility Bond Fund accrues interest based on the long-term corporate bond yield average for AA utilities reported by Moody’s Investors Service. The above-market earnings are calculated as the difference between actual earnings from the AA Utility Bond Fund investment option and hypothetical earnings that would have resulted using an interest rate equal to 120 percent of the applicable federal rate. | | | (6) | Amounts reported for 2020 consist of (i) perquisites and personal benefits (Mr. Smith $84,300, Mr. Lewis $50,099, Mr. Foster $54, Mr. Thomason $1,296, Mr. Simon $8,987, Mr. Welsch $54, Mr. Johnson $2,042, Mr. Vesey $1,935, Mr. Wells $6,052, and Ms. Loduca $9,323), (ii) a lump-sum annual stipend paid in lieu of providing perquisite benefits, with the exception of perquisite benefits noted in the chart below (Mr. Smith $35,000, Mr. Lewis $20,000, Mr. Foster $15,000, Mr. Thomason $15,000, Mr. Simon $25,000, Mr. Welsch $20,000, Mr. Johnson $35,000, Mr. Vesey $25,000, Mr. Wells $25,000, and Ms. Loduca $25,000), (iii) company contributions to defined contribution retirement plans (Mr. Smith $43,750, Mr. Lewis $71,771, Mr. Foster $52,503, Mr. Thomason $39,040, Mr. Simon $32,448, Mr. Welsch $65,809, Mr. Johnson $162,500, Mr. Vesey $76,349, Mr. Wells $22,075, and Ms. Loduca $16,947), (iv) tax-restoration payments to reflect additional taxation on relocation benefits (Mr. Smith $69,129 and Mr. Vesey $182) and temporary housing (Mr. Lewis $21,923), (v) severance payments earned upon separation from service (Mr. Vesey $2,863,209, Ms. Loduca $1,098,801), (vi) retainer provided to Mr. Smith for service as a member of the Boards of Directors from January 1 through June 30, 2020 ($60,000), and (vii) the value of interest paid on 2019 and 2020 dividends whose payout had been delayed until after the companies’ July 2020 emergence from Chapter 11 (Mr. Foster $79, Mr. Thomason $180, Mr. Simon $1,108, Mr. Welsch $264, Mr. Wells $1,364, and Ms. Loduca $239), | | | (7) | This number has increased slightly since our 2019 10-K/A to reflect updated assumptions on the applicable tax rates. |
2021 Joint Proxy Statement | 70 |
(4) Amounts represent payments received or deferred in 2023, 2022, and 2021 for achievement of corporate and organizational objectives in 2022, 2021, and 2020, respectively, under the STIP. Summary Compensation Table – 2020(Continued)
(5) Amounts reported for 2022 consist of (i) the change in pension value during 2022 for all NEOs (Ms. Poppe $13,269, Mr. Glickman $8,826, Ms. Santos $16,727, Mr. Wright $11,992, and Mr. Cox $13,095, and (ii) the above-market earnings on compensation deferred into the PG&E Corporation Supplemental Retirement Savings Plan and invested in the AA Utility Bond Fund for Mr. Simon ($11,337) and Mr. Singh ($3,251). The AA Utility Bond Fund accrues interest based on the long-term corporate bond yield average for AA utilities reported by Moody’s Investors Service. The above-market earnings are calculated as the difference between actual earnings from the AA Utility Bond Fund investment option and hypothetical earnings that would have resulted using an interest rate equal to 120 percent of the applicable federal rate. (6) Amounts reported for 2022 consist of (i) perquisites and personal benefits (Ms. Poppe $145,239, Mr. Glickman $54, Ms. Santos $7,754, Mr. Wright $8,414, Mr. Foster $54, Mr. Thomason $3,182, Mr. Simon $54, Mr. Singh $54, and Mr. Cox $45,192), (ii) company contributions to defined contribution retirement plans (Ms. Poppe $285,047, Mr. Glickman $112,730, Ms. Santos $147,923, Mr. Wright $153,363, Mr. Foster $100,859, Mr. Thomason $58,451, Mr. Simon $36,551, Mr. Singh $96,757, and Mr. Cox $103,077), and (iii) tax restoration payments to reflect additional taxation on relocation benefits (Ms. Poppe $8,222 and Mr. Cox $17,998). (7) Mr. Wright resigned effective February 6, 2023. (8) Mr. Foster is resigning effective May 4, 2023. (9) Mr. Thomason resigned effective January 9, 2023. The following chart provides additional information regarding certain perquisites and personal benefits that are included in the Summary Compensation Table and discussed in section (i) of footnote 6. Additionally, NEOs may receive de minimis incidental perquisites under a pre-approved perquisite policy (including company-paid insurance, service awards, electric vehicle charging, and similar benefits).| | | Transportation Services ($) | | Fitness ($) | | Executive Health ($) | | Financial Services ($) | | Relocation Services ($) | | W. L. Smith | | 3,814 | | 0 | | 0 | | 0 | | 80,459 | | M. A. Lewis | | 1,135 | | 0 | | 0 | | 0 | | 48,910 | | C. A. Foster | | 0 | | 0 | | 0 | | 0 | | 0 | | D. S. Thomason | | 0 | | 0 | | 0 | | 0 | | 0 | | J. R. Simon | | 0 | | 322 | | 0 | | 8,136 | | 0 | | J. M. Welsch | | 0 | | 0 | | 0 | | 0 | | 0 | | W. D. Johnson | | 1,070 | | 0 | | 0 | | 0 | | 945 | | A. M. Vesey | | 1,899 | | 0 | | 0 | | 0 | | 0 | | J. P. Wells | | 0 | | 0 | | 0 | | 5,584 | | 0 | | J. C. Loduca | | 0 | | 308 | | 0 | | 8,520 | | 0 |
| | | | | | | | | | | | | | | | | | | Fitness
($) | Executive
Health
($) | Relocation
Services
($) | AD&D
($) | Security Services
($) | | P. K. Poppe | 0 | 0 | 121,653 | 54 | 23,532 | | J. M. Glickman | 0 | 0 | 0 | 54 | 0 | | M. M. Santos | 0 | 7,700 | 0 | 54 | 0 | | A. L . Wright | 0 | 7,700 | 0 | 54 | 660 | | C. A. Foster | 0 | 0 | 0 | 54 | 0 | | D. S. Thomason | 3,128 | 0 | 0 | 54 | 0 | | J. R. Simon | 0 | 0 | 0 | 54 | 0 | | S. Singh | 0 | 0 | 0 | 54 | 0 | | J. Cox | 0 | 0 | 16,627 | 54 | 28,511 |
The above perquisites and personal benefits consist of the following: | • | Transportation services for Messrs. Smith, Lewis, Johnson, and Vesey to help ensure their safety and security while serving in the positions of CEO of PG&E Corporation and President of the Utility, consisting of car transportation for commute and incidental non-business travel. Amounts include the prorated salary and benefits burden of the drivers, and vehicle costs.• The value of reimbursements for health club fees, pursuant to a program available to certain management employees, including non-officers. • The cost of executive health services provided to executive officers. Amounts vary among officers, reflecting (i) the decisions of each individual officer regarding the specific types of tests and consultations provided, and (ii) the exact value of reimbursed expenses. • The provision of such services in 2021 has been limited to business-related travel only. | | | | | • | The value of reimbursements for health club fees, pursuant to a program available to certain management employees, including non-officers. | | | | | • | The cost of executive health services provided to executive officers. Amounts vary among officers, reflecting (i) the decisions of each individual officer regarding the specific types of tests and consultations provided, and (ii) the exact value of reimbursed expenses. Such benefit was suspended during 2020 due to lack of provider availability during the COVID-19 pandemic. | | | | | • | Fees paid to partially subsidize financial services provided by an independent contractor selected by PG&E Corporation to provide such services. | | | | | • | The cost to PG&E Corporation and the Utility, as applicable, for relocation assistance services, which may include moving services, payments to a third-party home sale assistance firm (which may include inspection, appraisal, and other costs related to the sale of the home, third-party service fees, etc.), mortgage subsidies, and commuting expenses during the relocation process. Recipients of relocation assistance also received tax reimbursement payments (Mr. Smith $69,129, and Mr. Lewis $21,923) with respect to this benefit in accordance with a broad-based program that provides relocation benefits to all employees. Such tax restoration payments are reflected in section (iv) of footnote 6 above. |
In addition to the perquisite benefits described above, NEOs are given a set stipend that each NEO may use as the officer sees fit. The stipend is intended to cover miscellaneous items in each NEO’s discretion (such as membership in professional organizations). The amount of this stipend is included in the Summary Compensation Table in the “All Other Compensation” column and is addressed in section (ii) of footnote 6. NEOs also were eligible to receive on-site parking, which was provided at no additional incremental cost to PG&E Corporation and the Utility.
Utility, as applicable, for relocation assistance services, which may include moving services, payments to a third-party home sale assistance firm (which may include inspection, appraisal, and other costs related to the sale of the home, third-party service fees, etc.), mortgage subsidies, and commuting expenses during the relocation process. Recipients of relocation assistance also received tax reimbursement payments (Mr. Cox, $17,998) with respect to this benefit in accordance with a broad-based program that provides relocation benefits to all employees. Such tax restoration payments are reflected in section (iv) of footnote 6 above. •The cost to PG&E Corporation and the Utility, as applicable, for providing enhanced personal residential security to certain officers based on risks associated with these positions. Such home security program was approved by, as applicable, the Committee or either company's Board following, and consistent with, a security assessment conducted by an independent security consulting firm. The amounts shown in the table include the incremental cost of expenses incurred related to the installation and remote and in-person monitoring of the security system, and, as applicable, short-term home security guards. Please see the CD&A beginning on page 3942 for additional information regarding the elements of compensation discussed above, including information regarding salary, short-term incentives, and long-term incentives. Additional information regarding grants of LTIP awards can be found in the narrative following the “Grants of Plan-Based Awards in 2020” table.2021 Joint Proxy Statement | 71 |
2022” table below. | | | | Grants of Plan-Based Awards in 2022 |
Grants of Plan-Based Awards in 2020
This table provides information regarding incentive awards and other stock-based awards granted during 20202022 to NEOs. | | | | | Committee / | | Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(1) | | Estimated Future Payouts
Under Equity Incentive
Plan Awards(2) | | All Other
Stock
Awards:
Number
of Shares
of Stock | | Grant
Date Fair
Value of
Stock and
Option | | | | | | Board Action | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | or Units | | Awards | | Name | | Grant Date | | Date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (#)(3) | | ($)(4) | | W. L. Smith(5) | | 11/13/2019 | | 9/25/2019 | | | | | | | | | | | | | | 11,628 | | 105,001 | | | | 8/3/2020 | | 7/29/2020 | | | | | | | | | | | | | | 163,934 | | 1,499,996 | | | | 8/3/2020 | | 7/29/2020 | | | | | | | | 191,257 | | 382,514 | | 956,285 | | | | 3,500,003 | | M. A. Lewis | | | | | | 171,966 | | 343,931 | | 644,871 | | | | | | | | | | | | | | 3/2/2020 | | 3/4/2020 | | | | | | | | 35,519 | | 71,038 | | 177,595 | | | | 649,998 | | | | 3/2/2020 | | 3/4/2020 | | | | | | | | 2,732 | | 5,464 | | 13,660 | | | | 49,996 | | C. A. Foster | | | | | | 75,822 | | 151,645 | | 284,334 | | | | | | | | | | | | | | 3/2/2020 | | 3/4/2020 | | | | | | | | 16,394 | | 32,787 | | 81,968 | | | | 300,001 | | D. S. Thomason | | | | | | 80,029 | | 160,057 | | 300,107 | | | | | | | | | | | | | | 3/2/2020 | | 3/4/2020 | | | | | | | | 21,858 | | 43,716 | | 109,290 | | | | 400,001 | | | | 3/2/2020 | | 8/13/2020 | | | | | | | | 16,394 | | 32,787 | | 81,968 | | | | 300,001 | | J. R. Simon | | | | | | 270,400 | | 540,800 | | 1,014,000 | | | | | | | | | | | | | | 3/2/2020 | | 3/4/2020 | | | | | | | | 95,629 | | 191,257 | | 478,143 | | | | 1,750,002 | | | | 8/14/2020 | | 8/13/2020 | | | | | | | | | | | | | | 139,479 | | 1,312,497 | | J. M. Welsch | | | | | | 171,675 | | 343,350 | | 643,781 | | | | | | | | | | | | | | 3/2/2020 | | 3/4/2020 | | | | | | | | 35,519 | | 71,038 | | 177,595 | | | | 649,998 | | | | 3/2/2020 | | 8/13/2020 | | | | | | | | 26,667 | | 53,333 | | 133,333 | | | | 487,997 | | W. D. Johnson(6) | | | | | | 0 | | 0 | | 0 | | | | | | | | | | 0 | | A. M. Vesey(7) | | | | | | 249,603 | | 499,206 | | 936,012 | | | | | | | | | | 0 | | J. P. Wells | | | | | | 183,962 | | 367,924 | | 689,857 | | | | | | | | | | | | | | 3/2/2020 | | 3/4/2020 | | | | | | | | 95,629 | | 191,257 | | 478,143 | | | | 1,750,002 | | | | 8/14/2020 | | 8/13/2020 | | | | | | | | | | | | | | 139,479 | | 1,312,497 | | J. C. Loduca | | | | | | 200,914 | | 401,829 | | 753,429 | | | | | | | | | | | | | | 3/2/3030 | | 3/4/2020 | | | | | | | | 65,574 | | 131,148 | | 327,870 | | | | 1,200,004 |
(1) | Compensation opportunity granted for 2020 under the STIP. Actual amounts earned are reported in the Summary Compensation Table in the “Non-Equity Incentive Plan Compensation” column. Threshold represents a 0.5 enterprise-wide STIP performance score and a 100 percent individual performance modifier. Maximum reflects a 1.5 enterprise-wide STIP performance score and a 125 percent individual performance modifier. | | | | | (2)2023 Joint Proxy Statement | Represents performance shares granted in 2020 under the 2014 LTIP. Threshold equals 0.5 times target. Maximum equals 2.0 times target and a 125 percent financial stability modifier based on TSR.65 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Committee / | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other
Stock
Awards:
Number
of Shares
of Stock | Grant
Date Fair
Value of
Stock and
Option | | | Board Action | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Awards | | Name | Grant Date | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | ($)(3) | | Patricia K. Poppe | | | 945,000 | 1,890,000 | 3,780,000 | 0 | 0 | 0 | 0 | 0 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 357,303 | 714,605 | 1,429,210 | 0 | 8,075,037 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 39,170 | 78,340 | 156,680 | 0 | 1,425,007 | | 10/12/2022 | 10/12/2022 | 0 | 0 | 0 | 13,259 | 26,517 | 53,034 | 0 | 569,585 | | Jason M. Glickman | | | 267,188 | 534,375 | 1,068,750 | 0 | 0 | 0 | 0 | 0 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 65,821 | 131,641 | 263,282 | 0 | 1,487,543 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 7,216 | 14,432 | 28,864 | 0 | 262,504 | | 10/12/2022 | 10/12/2022 | 0 | 0 | 0 | 2,442 | 4,884 | 9,768 | 0 | 104,908 | | Marlene M. Santos | | | 390,000 | 780,000 | 1,560,001 | 0 | 0 | 0 | 0 | 0 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 97,789 | 195,578 | 391,156 | 0 | 2,210,031 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 10,721 | 21,441 | 42,882 | 0 | 390,006 | | 10/12/2022 | 10/12/2022 | 0 | 0 | 0 | 3,629 | 7,257 | 14,514 | 0 | 155,880 | Adam L.
Wright | | | 390,000 | 780,000 | 1,560,000 | 0 | 0 | 0 | 0 | 0 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 97,789 | 195,578 | 391,156 | 0 | 2,210,031 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 10,721 | 21,441 | 42,882 | 0 | 390,006 | | 10/12/2022 | 10/12/2022 | 0 | 0 | 0 | 3,629 | 7,257 | 14,514 | 0 | 155,880 | | Christopher A. Foster | | | 243,125 | 486,250 | 972,500 | 0 | 0 | 0 | 0 | 0 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 65,821 | 131,641 | 263,282 | 0 | 1,487,543 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 7,216 | 14,432 | 28,864 | 0 | 262,504 | | 10/12/2022 | 10/12/2022 | 0 | 0 | 0 | 2,442 | 4,884 | 9,768 | 0 | 104,908 | | David S. Thomason | | | 96,494 | 192,988 | 385,975 | 0 | 0 | 0 | 0 | 0 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 15,045 | 30,090 | 60,180 | 0 | 340,017 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 1,650 | 3,299 | 6,598 | 0 | 60,013 | | 10/12/2022 | 10/12/2022 | 0 | 0 | 0 | 559 | 1,117 | 2,234 | 0 | 23,993 | | John R. Simon | | | 304,593 | 609,186 | 1,218,372 | 0 | 0 | 0 | 0 | 0 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 65,821 | 131,641 | 263,282 | 0 | 1,487,543 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 7,216 | 14,432 | 28,864 | 0 | 262,504 | | 10/12/2022 | 10/12/2022 | 0 | 0 | 0 | 2,442 | 4,884 | 9,768 | 0 | 104,908 | | Sumeet Singh | | | 253,125 | 506,250 | 1,012,500 | 0 | 0 | 0 | 0 | 0 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 65,821 | 131,641 | 263,282 | 0 | 1,487,543 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 7,216 | 14,432 | 28,864 | 0 | 262,504 | | 10/12/2022 | 10/12/2022 | 0 | 0 | 0 | 2,442 | 4,884 | 9,768 | 0 | 104,908 | | Julius Cox | | | 239,688 | 479,375 | 958,751 | 0 | 0 | 0 | 0 | 0 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 47,014 | 94,027 | 188,054 | 0 | 1,062,505 | | 3/1/2022 | 2/23/2022 | 0 | 0 | 0 | 5,154 | 10,308 | 20,616 | 0 | 187,501 | | 10/12/2022 | 10/12/2022 | 0 | 0 | 0 | 1,745 | 3,489 | 6,978 | 0 | 74,944 |
(1) Compensation opportunity granted for 2022 under the STIP. Actual amounts earned are reported in the Summary Compensation Table in the “Non-Equity Incentive Plan Compensation” column. Threshold equals a 0.5 times target. Maximum equals 2.0 times target. (2) Represents PSUs granted in 2022 under the 2021 LTIP. Thresholds equals 0.5 times target. Maximum equals 2.0 times target for PSUs (3) For PSUs with a relative TSR measure, the number and fair value of awards are measured at the grant date using a Monte Carlo simulation valuation model. The model assumes that performance conditions are probable of being achieved, applies a risk-free interest rate meant to equal
| | | | | | (3)2023 Joint Proxy Statement | Represents RSUs granted in 2020 under the 2014 LTIP. For Mr. Smith only, includes RSUs received as a non-employee director in 2019, as further described in footnote 2(ii) to the “2020 Director Compensation” table on page 31, and the section entitled “Non-Employee Director Stock-Based Compensation” on page 30. Such awards were granted following receipt of approval from the Bankruptcy Court, and consistent with the Equity Grant Date Policy. | (4) | For RSUs and performance shares, the grant date fair value is based on the PG&E Corporation stock price at close on the grant date. | (5) | Mr. Smith did not participate in the STIP in 2020. | (6) | Mr. Johnson did not participate in the STIP and did not receive any grants under the LTIP in 2020. | (7) | Mr. Vesey did not receive an LTIP award for 2020, according to the terms of his separation agreement.66 |
the expected yield on a U.S. 3 Year Treasury Note, and uses historical common stock volatilities from the Company and from peer companies for the 36-month period preceding the grant date. On October 12, 2022, and due to certain one-time events, the Company adjusted the volatility used in the model to better balance the Company’s own history with that of its industry. The modeling adjustment resulted in changes to the number of certain awards granted during 2021 and 2022 as well as to each award’s respective fair value measurement. For 2021, the companies requested, and each NEO consented to, a cancellation of the excess PSUs. For 2022, each NEO received a supplemental corrective grant. Only the adjustment made to the 2022 awards resulted in an increase to total compensation expense. The assumed per-share value on March 1, 2022, was $18.19 and the assumed per-share value on October 12, 2022, was $21.48. Detailed information regarding compensation reported in the tables entitled “Summary Compensation Table” one page 64 and “Grants of Plan-Based Awards,”Awards” on page 65, including the relative amounts apportioned to different elements of compensation, can be found in the CD&A. Information regarding specific grants and arrangements is provided below. Annual awards for 2020 were approved in March 2020, subject to approval from the Bankruptcy Court. As such, the awards were not formally provided until after the companies’ emergence from Chapter 11, at which time they were ratified by the refreshed Compensation Committee.
2021 Joint Proxy Statement | 72 |
Grants of Plan-Based Awards in 2020(Continued)
STIP Awards Information regarding the terms and basis of 20202022 STIP awards can be found in the CD&A. Performance shares granted in 20202022 will vest, if at all, upon certificationthe third anniversary of performance against preestablished operationalthe grant date, following and financial measures at the end of thebased on results during a three-year performance period from January 1, 2020,2022, to December 31, 2022.2024. Upon vesting, performance sharesPSUs are settled in shares of PG&E Corporation common stock, net of the number of shares having a value equal to requiredapplicable withholding taxes. The specific payout formulas are discussed in the CD&A. All PSUs may be subject to earlier vesting or forfeiture upon certain events, in accordance with the terms of the grant. Each time that a cash dividend is paid on PG&E Corporation common stock, an amount equal to the cash dividend per share multiplied by the number of performance sharesPSUs granted to the recipient will be accrued on behalf of the recipient. At the end of the vesting period, the amount of any accrued dividend equivalents will be increased or decreased by the same payout factor used to increase or decrease the number of vested performance sharesPSUs for the period. Restricted Stock Units
No annual RSU awards were granted in 2020. The $1,312,500 RSU retention award granted to Mr. Simon on August 14, 2020, vests one-half on August 14, 2021, and one-half on August 14, 2022. Upon vesting, RSUs are settled in an equivalent number of shares of PG&E Corporation common stock, net of the number of shares having a value equal to required withholding taxes. All RSUs may be subject to earlier vesting or forfeiture upon certain events, in accordance with the terms of the grant. The $1,312,500 RSU retention award granted to Mr. Wells on August 14, 2020, was forfeited upon Mr. Wells’ resignation on September 26, 2020.
Each time that a cash dividend is paid on PG&E Corporation common stock, an amount equal to the cash dividend per share multiplied by the number of outstanding RSUs granted to the recipient will be accrued on behalf of the recipient. Any accrued dividends are paid in cash at the time the related RSUs are settled.
Mr. Smith received RSUs in 2019 as a non-employee director, as further described in footnote 2(ii) to the “2020 Director Compensation” table on page 31, and the section entitled “Non-Employee Director Stock-Based Compensation” on page 30.
2021 Joint Proxy Statement | 73 |
| | | | Outstanding Equity Awards at Fiscal Year-End – 2022 |
Outstanding Equity Awards at Fiscal Year-End – 2020
This table provides additional information regarding performance shares, stock options, and RSUs that were held as of December 31, 2020,2022, by the NEOs, including awards granted prior to 2020.2022. Any awards described below that were granted in 20202022 also are reflected in the “Grants of Plan-Based Awards” table. | | | Option Awards | | | Stock Awards | | | Name | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable(1) | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(2) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | | Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(3) | | | | Market Value
of Shares or
Units of Stock
That Have
Not Vested
($)(4) | | | | Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That
Have Not
Vested (#)(5) | | | | Equity Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have
Not Vested
($)(4) | | | W. L. Smith | | 0 | | 0 | | | | | | | 136,748 | (6) | | | 1,703,880 | | | | 0 | | | | 0 | | | M. A. Lewis | | 2,696 | | 1,349 | | 42.51 | | 8/1/2028 | | | 971 | (6) | | | 12,099 | | | | 191,255 | (7) | | | 2,383,037 | | | C. A. Foster | | 2,607 | | 1,304 | | 41.26 | | 3/1/2028 | | | 1,651 | (6) | | | 20,571 | | | | 81,968 | (7) | | | 1,021,321 | | | D. S. Thomason | | 4,236 | | 2,118 | | 41.26 | | 3/1/2028 | | | 1,182 | (6) | | | 14,728 | | | | 191,258 | (7) | | | 2,383,075 | | | J. R. Simon | | 29,326 | | 14,663 | | 41.26 | | 3/1/2028 | | | 147,659 | (6) | | | 1,839,831 | | | | 478,143 | (7) | | | 5,957,662 | | | J. M. Welsch | | 6,517 | | 3,259 | | 41.26 | | 3/1/2028 | | | 1,818 | (6) | | | 22,652 | | | | 310,928 | (7) | | | 3,874,163 | | | W. D. Johnson | | 272,266 | | 0 | | 25.00 | | 8/14/2023 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | 340,333 | | 0 | | 40.00 | | 8/14/2023 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | 363,022 | | 0 | | 50.00 | | 8/14/2024 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | A. M. Vesey | | 0 | | 0 | | – | | – | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | J. P. Wells | | 0 | | 0 | | – | | – | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | J. C. Loduca | | 4,888 | | 2,444 | | 41.26 | | 8/16/2021 | | | 1,364 | (6) | | | 16,995 | | | | 63,753 | (7) | | | 794,362 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | Stock Awards | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(2) | Option Exercise Price ($) | Option
Expiration
Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4) | | P. K. Poppe | 0 | 0 | 0 | 0 | 1,623,745 | 26,402,094 | 1,388,953 | 37,010,898 | | J. M. Glickman | 0 | 0 | 0 | 0 | 0 | 0 | 300,232 | 7,647,436 | | M. M. Santos | 0 | 0 | 0 | 0 | 106,053 | 1,724,422 | 435,970 | 11,145,254 | | A. L. Wright | 0 | 0 | 0 | 0 | 72,926 | 1,185,777 | 452,952 | 11,454,259 | | C. A. Foster | 3,911 | 0 | 41.26 | 3/1/2028 | 72,203 | 1,174,021 | 228,873 | 6,330,636 | | D. S. Thomason | 6,354 | 0 | 41.26 | 3/1/2028 | 106,722 | 1,735,300 | 69,692 | 1,762,356 | | J. R. Simon | 43,989 | 0 | 41.26 | 3/1/2028 | 298,709 | 4,857,008 | 258,699 | 6,869,509 | | S. Singh | 0 | 0 | 0 | 0 | 112,134 | 1,823,299 | 194,981 | 5,710,154 | | J. Cox | 0 | 0 | 0 | 0 | 32,362 | 526,206 | 147,845 | 4,234,624 |
(1) Consists of unexercised stock options from awards granted in 2018. (2) As of December 31, 2022, no unvested stock options were outstanding. (3) Consists of unvested RSUs and unvested PSUs granted in 2020 for which the performance period ended on December 31, 2022. Earned, but not vested PSUs are shown in the table below as Earned PSUs. See the CD&A for additional details regarding awards granted in 2022. (4) Market value is based upon the $16.26 closing price of PG&E Corporation common stock on December 30,2022 (the last trading date of fiscal 2022). (5) Consists of unvested PSUs granted in 2021 and 2022. Consistent with SEC rules, the number of shares is presented assuming target performance for 2021 awards using operational measures and maximum performance for 2021 awards using measures based on TSR, and assuming maximum performance for 2022 awards using operational measures and threshold performance for 2022 awards using measures based on TSR. The numbers reported in this column reflect adjustments to the number of PSUs awarded for 2021 and 2022 to reflect changes in the Monte Carlo simulation values for relative TSR. See the CD&A and Grant of Plan-Based Awards table for additional details regarding awards granted in 2022. (6) Disclosed below is the vesting schedule for each of the RSU awards described above.
(1) | For all NEOs except Mr. Johnson, consists of unexercised stock options from awards granted in 2018. For Mr. Johnson, consists of unexercised vested performance-based stock options from awards granted in 2019. | | | | | (2) | Consists of unvested stock options from awards granted in 2018. Such options vested on March 1, 2021. | (3) | Includes (a) performance shares granted in 2018 for which the performance period ended on December 31, 2020 and for which the reported number reflects a 0 percent payout, and (b) unvested RSUs. See the CD&A for additional details regarding awards granted in 2020. | (4) | Value based on the December 31, 2020 per-share closing price of PG&E Corporation common stock of $12.46. | (5) | Consists of unvested performance shares granted in 2020. Consistent with SEC rules, the number of shares is presented assuming maximum performance for 2020 awards using operational measures and maximum performance for the financial stability modifier based on TSR. See the CD&A for additional details regarding awards granted in 2020. | (6) | Disclosed below is the vesting schedule for each of the RSU and earned PSU awards described above. | (7) | Disclosed below is the vesting schedule for each of the unearned PSU awards described above. |
| | | | | | | VESTING SCHEDULE | | | | | Name | | Award Date | | Award Type | | 2/25/2021 | | 3/1/2021 | | 8/1/2021 | | 8/13/2021 | | 12/3/2021 | | 8/13/2022 | | Total | | | W. L. Smith | | 08/03/2020 | | Earned PSU | | 136,748 | | | | | | | | | | | | 136,748 | | | M. A. Lewis | | 08/01/2018 | | RSU | | | | | | 971 | | | | | | | | 971 | | | C. A. Foster | | 03/01/2018 | | RSU | | | | 728 | | | | | | | | | | 728 | | | | | 12/03/2018 | | RSU | | | | | | | | | | 923 | | | | 923 | | | D. S. Thomason | | 03/01/2018 | | RSU | | | | 1,182 | | | | | | | | | | 1,182 | | | J. R. Simon | | 03/01/2018 | | RSU | | | | 8,180 | | | | | | | | | | 8,180 | | | | | 08/14/2020 | | RSU | | | | | | | | 69,739 | | | | | | 69,739 | | | | | 08/14/2020 | | RSU | | | | | | | | | | | | 69,740 | | 69,740 | | | J. M. Welsch | | 03/01/2018 | | RSU | | | | 1,818 | | | | | | | | | | 1,818 | | | J. C. Loduca | | 03/01/2018 | | RSU | | | | 1,364 | | | | | | | | | | 1,364 | |
20212023 Joint Proxy Statement | 7467 |
(7) Disclosed below is the vesting schedule for each of the earned, but not vested PSUs, and the unearned PSU awards described above. | | | | Outstanding Equity Awards at Fiscal Year-End – 2022 (Continued) |
| | | | | | | | | | | | | | | | | | | Name | Award Date | Award Type | Vesting Schedule | Units # | Total | | Patricia K. Poppe | 3/1/2021 | RSU | 1/4/2023 | 1,455,103 | | | 3/1/2021 | RSU | 3/1/2023 | 84,321 | | | 3/1/2021 | RSU | 3/1/2024 | 84,321 | 1,623,745 | | Marlene M. Santos | 3/15/2021 | RSU | 3/15/2023 | 106,053 | 106,053 | | Adam L. Wright | 3/1/2021 | RSU | 3/1/2023 | 72,926 | 72,926 | | Christopher A. Foster | 3/1/2021 | RSU | 3/1/2023 | 4,862 | | | 3/22/2021 | RSU | 3/22/2023 | 8,371 | | | 3/1/2021 | RSU | 3/1/2024 | 4,862 | | | 3/22/2021 | RSU | 3/22/2024 | 8,371 | 26,466 | | John R. Simon | 3/1/2021 | RSU | 3/1/2023 | 15,953 | | | 3/1/2021 | RSU | 3/1/2024 | 15,953 | 31,906 | | Sumeet Singh | 3/1/2021 | RSU | 3/1/2023 | 6,518 | | | 3/1/2021 | RSU | 3/1/2024 | 6,518 | 13,036 | | Julius Cox | 3/1/2021 | RSU | 3/1/2023 | 26,436 | | | 3/1/2021 | RSU | 3/1/2024 | 5,926 | 32,362 |
| | | | | | | | | | | | | | | | | | | Patricia K. Poppe | 3/1/2021 | Unearned PSU | 3/1/2024 | 569,491 | | | 3/1/2022 | Unearned PSU | 3/1/2025 | 819,462 | 1,388,953 | | Jason M. Glickman | 5/3/2021 | Unearned PSU | 5/3/2024 | 149,275 | | | 3/1/2022 | Unearned PSU | 3/1/2025 | 150,957 | 300,232 | | Marlene M. Santos | 3/15/2021 | Unearned PSU | 3/15/2024 | 211,694 | | | 3/1/2022 | Unearned PSU | 3/1/2025 | 224,276 | 435,970 | | Adam L. Wright | 3/1/2021 | Unearned PSU | 3/1/2024 | 228,676 | | | 3/1/2022 | Unearned PSU | 3/1/2025 | 224,276 | 452,952 | | Christopher A. Foster | 3/2/2020 | Earned PSU | 2/15/2023 | 45,737 | | | 3/1/2021 | Unearned PSU | 3/1/2024 | 21,111 | | | 3/22/2021 | Unearned PSU | 3/22/2024 | 56,805 | | | 3/1/2022 | Unearned PSU | 3/1/2025 | 150957 | 274,610 | | David S. Thomason | 3/2/2020 | Earned PSU | 2/15/2023 | 106,722 | | | 3/1/2021 | Unearned PSU | 3/1/2024 | 35,186 | | | 3/1/2022 | Unearned PSU | 3/1/2025 | 34,506 | 176,414 | | John R. Simon | 3/2/2020 | Earned PSU | 2/15/2023 | 266,803 | | | 3/1/2021 | Unearned PSU | 3/1/2024 | 107,742 | | | 3/1/2022 | Unearned PSU | 3/1/2025 | 150,957 | 525,502 | | Sumeet Singh | 3/2/2020 | Earned PSU | 2/15/2023 | 99098 | | | 3/1/2021 | Unearned PSU | 3/1/2024 | 44,024 | | | 3/1/2022 | Unearned PSU | 3/1/2025 | 150,957 | 294,079 |
Outstanding Equity Awards at Fiscal Year-End – 2020(Continued)
| | | | | | | VESTING SCHEDULE | | Name | | Award Date | | Award Type | | 3/14/2023 | | Total | | | M. A. Lewis | | 03/02/2020 | | Unearned PSU | | 177,595 | | 177,595 | | | | | 03/02/2020 | | Unearned PSU | | 13,660 | | 13,660 | | | C. A. Foster | | 03/02/2020 | | Unearned PSU | | 81,968 | | 81,968 | | | D. S. Thomason | | 03/02/2020 | | Unearned PSU | | 109,290 | | 109,290 | | | | | 03/02/2020 | | Unearned PSU | | 81,968 | | 81,968 | | | J. R. Simon | | 03/02/2020 | | Unearned PSU | | 478,143 | | 478,143 | | | J. M. Welsch | | 03/02/2020 | | Unearned PSU | | 177,595 | | 177,595 | | | | | 03/02/2020 | | Unearned PSU | | 133,333 | | 133,333 | | | J. C. Loduca | | 03/02/2020 | | Unearned PSU | | 63,753 | | 63,753 | |
Option Exercises and Stock Vested During 2020
| | | | | | | | | | | | | | | | | | | Julius Cox | 3/1/2021 | Unearned PSU | 3/1/2024 | 40,021 | | | 3/1/2022 | Unearned PSU | 3/1/2025 | 107,824 | 147,845 |
| | | | Option Exercises and Stock Vested during 2022 |
This table provides additional information regarding the amounts received during 20202022 by NEOs upon vesting or transfer of restricted stock and other stock-based awards. | | | Option Awards | | | Stock Awards | | | Name | | Number of
Shares Acquired
on Exercise
(#) | | Value
Realized on
Exercise ($) | | | Number
of Shares
Acquired on
Vesting (#)(1) | | Value
Realized
on
Vesting
($)(1) | | | W. L. Smith | | | | | | | 175,562 | | 2,026,307 | | | M. A. Lewis | | | | | | | 971 | | 9,079 | | | C. A. Foster | | | | | | | 2,457 | | 37,175 | | | D. S. Thomason | | | | | | | 2,457 | | 40,855 | | | J. R. Simon | | | | | | | 16,680 | | 276,887 | | | J. M. Welsch | | | | | | | 3,307 | | 54,299 | | | W. D. Johnson | | | | | | | 96,240 | | 1,724,621 | | | A. M. Vesey | | | | | | | 42,499 | | 734,295 | | | J. P. Wells | | | | | | | 17,589 | | 290,568 | | | J. C. Loduca | | | | | | | 6,233 | | 90,052 | |
(1) | Reflects performance shares that vested on February 25, 2020, and RSUs that vested on March 1, 2020, July 1, 2020, August 1, 2020, November 12, 2020, November 18, 2020, and December 3, 2020. Also includes the value of dividends upon vesting. No dividends have been paid, nor dividend equivalents accrued, since December 2017. |
2021 Joint Proxy Statement | 75 |
| | | | | | | | | | | | | | | | Option Awards | Stock Awards | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(1) | | P. K. Poppe | 0 | 0 | 1,539,423 | 19,054,296 | | J. M. Glickman | 0 | 0 | 0 | 0 | | M. M. Santos | 0 | 0 | 106,052 | 1,219,598 | | A. L. Wright | 0 | 0 | 72,926 | 824,064 | | C. A. Foster | 0 | 0 | 13,233 | 152,212 | | D. S. Thomason | 0 | 0 | 0 | 0 | | J. R. Simon | 0 | 0 | 85,692 | 1,026,204 | | S. Singh | 0 | 0 | 6,518 | 73,653 | | J. Cox | 0 | 0 | 26,435 | 298,716 |
(1) Reflects RSUs that vested on January 4, 2022, March 1, 2022, March 15, 2022, March 22, 2022, and August 13, 2022. Also includes the value of dividends upon vesting. No dividends have been paid, nor dividend equivalents accrued, since December 2017. Aggregate dollar amount realized upon vesting was computed by multiplying the number of shares of stock by the market value of the underlying shares on the applicable vesting date. Pension Benefits – 2020
This table provides information for each NEO relating to accumulated benefits as of December 31, 2020,2022, under any plan that provides for payments or other benefits at, after, or relating to retirement. | Name | | Plan Name | | | Number
of Years
Credited
Service (#) | | | | Present
Value of
Accumulated
Benefits ($) | | | | Payments
During
Last Fiscal
Year ($) | | | W. L. Smith | | Pacific Gas and Electric Company Retirement Plan | | | 0.5 | | | | 21,354 | | | | 0 | | | M. A. Lewis | | Pacific Gas and Electric Company Retirement Plan | | | 2.4 | | | | 48,669 | | | | 0 | | | C. A. Foster | | Pacific Gas and Electric Company Retirement Plan | | | 9.3 | | | | 476,597 | | | | 0 | | | D. S. Thomason | | Pacific Gas and Electric Company Retirement Plan | | | 19.1 | | | | 1,192,504 | | | | 0 | | | J. R. Simon | | Pacific Gas and Electric Company Retirement Plan | | | 13.7 | | | | 3,384,324 | | | | 0 | | | | | PG&E Corporation Supplemental Executive Retirement Plan | | | 13.7 | | | | 264,755 | | | | 0 | | | J. M. Welsch | | Pacific Gas and Electric Company Retirement Plan | | | 36.8 | | | | 2,887,832 | | | | 0 | | | W. D. Johnson | | Pacific Gas and Electric Company Retirement Plan | | | 1.2 | | | | 45,638 | | | | 0 | | | A. M. Vesey | | Pacific Gas and Electric Company Retirement Plan | | | 0.9 | | | | 45,638 | | | | 0 | | | J. P. Wells | | Pacific Gas and Electric Company Retirement Plan | | | 13.5 | | | | 1,454,815 | | | | 0 | | | | | PG&E Corporation Supplemental Executive Retirement Plan | | | 13.5 | | | | 235,895 | | | | 0 | | | J. C. Loduca | | Pacific Gas and Electric Company Retirement Plan | | | 20.3 | | | | 2,399,067 | | | | 0 | | | | | PG&E Corporation Supplemental Executive Retirement Plan | | | 20.3 | | | | 217,972 | | | | 0 | |
| | | | | | | | | | | | | | | | Name | Plan Name | Number
of Years
Credited
Service (#) | Present
Value of
Accumulated
Benefits ($) | Payments
During
Last Fiscal
Year ($) | | P. K. Poppe | Pacific Gas and Electric Company Retirement Plan | 1.99 | 31,467 | 0 | | J. M. Glickman | Pacific Gas and Electric Company Retirement Plan | 1.66 | 22,199 | 0 | | M. M. Santos | Pacific Gas and Electric Company Retirement Plan | 1.8 | 39,019 | 0 | | A. L. Wright | Pacific Gas and Electric Company Retirement Plan | 1.92 | 25,687 | 0 | | C. A. Foster | Pacific Gas and Electric Company Retirement Plan | 11.32 | 291,596 | 0 | | D. S. Thomason | Pacific Gas and Electric Company Retirement Plan | 21.13 | 730,173 | 0 | | J. R. Simon | Pacific Gas and Electric Company Retirement Plan | 15.71 | 2,676,099 | 0 | | J. R. Simon | PG&E Corporation Supplemental Executive Retirement Plan | 15.71 | 899,385 | 0 | | S. Singh | Pacific Gas and Electric Company Retirement Plan | 20.64 | 651,546 | 0 | | J. Cox | Pacific Gas and Electric Company Retirement Plan | 1.92 | 29,821 | 0 |
Additional information regarding compensation reported in the “Pension Benefits” table, and any associated policies, can be found in the CD&A. The present value of accumulated benefits as of December 31, 2020,2022, is determined assuming that the NEOs retire at the earliest unreduced retirement age, using mortality and interest assumptions consistent with those used in preparing PG&E Corporation’s and the Utility’s financial statements. The RP-2014 “Employees” mortality table was used without collar or amount adjustments (adjusted to 20112006 using a variation of MP-2014). Rates were projected on a generational basis from 20112006 using a variation of MP-2014. Interest discount rates of 2.775.54 percent and 2.575.42 percent were used for the Pacific Gas and Electric Company Retirement Plan (Retirement Plan) and the PG&E Corporation Supplemental Executive Retirement Plan (SERP), respectively. For 2020,2022, the pension benefits described in the above table are provided to officers under two plans. The Utility provides retirement benefits to all its eligible employees, including its officers, under the Retirement Plan, which is a tax-qualified defined benefit pension plan. The Retirement Plan historically also has provided benefits to a significant number of PG&E Corporation’s employees and officers. As ofSince April 1, 2007, all PG&E Corporation employees and officers are eligible to participate in the Retirement Plan.
| | | | | | | 2023 Joint Proxy Statement | 69 |
The Retirement Plan has two forms of benefit.benefit formula: a final pay formula and a cash balance formula. With respect to the Retirement Plan’s final pay benefit formula, a participating officer may begin receiving tax-qualified pension benefits at age 55, but benefits will be reduced unless the individual has at least 35 years of service.service and subject to adjustment for actuarial factors, including if an individual commences retirement after becoming eligible for an unreduced pension. At age 65, a participant becomes eligible for an unreduced pension, irrespective of the years of service. Between age 55 and age 65, any pension benefit may be reduced based on the number of years of service, and in accordance with the Retirement Plan’s early retirement reduction factors. The normal benefit formula is 1.7 percent of the average annual salary for the last 36 consecutive months of service multiplied by years of credited service. The default form of benefit is a single-life annuity for participants who are unmarried at retirement or a 50 percent joint spousal annuity for married participants. However, other types of joint pensions are available, and participants may designate non-spousal joint pensioners (subject to spousal consent). Effective January 1, 2013, a cash balance benefitformula was added to the Retirement Plan. Employees hired or re-hired after a break in employment on or after January 1, 2013, participate in the cash balance benefit. Employees hired before January 1, 2013, were given a one-time opportunity during 2013 to irrevocably select to switch to the cash balance benefit on a going-forward basis, effective January 1, 2014, or to retain the final pay benefit to which they were otherwise entitled. On the last day of each year (or on the date of benefit commencement, if earlier), an employee’s cash balance account is credited with pay credits based on a point system of age plus service and eligible pay during the year. At the end of each calendar quarter, the account is credited with interest credits, based on an average of the 30-year Treasury rates for the three months before the calendar quarter. Special interest credit rules apply in the quarter in which the benefit payment commences. The default forms of payment are similar to those under the final pay benefit formula. Additionally, however, a cash balance participant may elect a lump-sum payout that is eligible for rollover into an Individual Retirement Account or other tax-advantaged employer plan. Cash balance participants may elect to receive their vested benefit when they leave employment with any participating employer, regardless of whether they have attained age 55. The cash balance benefit does not include an early retirement reduction. No current NEOs elected to switch to the cash balance benefit. 2021 Joint Proxy Statement | 76 |
Pension Benefits – 2020(Continued)
PG&E Corporation’s non-qualified SERP provides benefits to certain officers and key employees. The SERP benefit formula is 1.7 percent of the average of the three highest combined salary and annual STIP payments during the last 10 years of service, multiplied by years of credited service, less the amount of the participant’s benefit from the Retirement Plan. Payments are in the form of a single-life annuity or, at the election of the officer, a joint spousal annuity. Normal retirement age is 65. Benefits may begin earlier, on the later of the NEO’s reaching age 55 or separation from service with the companies, subject to reduction depending on years of credited service, in accordance with the Retirement Plan’s early retirement reduction factors. Payments are reduced by amounts payable from the Retirement Plan. Effective January 1, 2013, the SERP participation was closed to new participants. Individuals who do not participate in the SERP but who are newly hired or promoted to officer after January 1, 2013, may be eligible to participate in the 2013 PG&E Corporation Defined Contribution Executive Supplemental Retirement Plan (DC-ESRP), a non-tax-qualified deferred compensation plan. All NEOs with the exception of Messrs.Mr. Simon and Wells and Ms. Loduca participate in the DC-ESRP. See the table entitled “Non-qualified Deferred Compensation— 2020” beginning on page 772022” below and the accompanying narrative for additional DC-ESRP details. At December 31, 2020, Messrs. Smith and Lewis were eligible for early retirement under the Retirement Plan. The cash balance benefit does not include an early retirement reduction.At December 31, 2020,2022, Mr. Simon was eligible for early retirement under the Retirement Plan and the SERP. If Mr. Simon had retired on December 31, 2020,2022, his benefit under both plans would have been subject to an early retirement reduction of 2714 percent.
At December 31, 2020, Mr. Welsch was eligible for retirement with unreduced benefits under the Retirement Plan.
Messrs. Johnson and Vesey’s benefits under the Retirement Plan cash balance benefit were unreduced when their employment ended. Mr. Wells’ and Ms. Loduca’s benefits under the Retirement Plan and the SERP were subject to reductions of 30 percent and 26 percent, respectively, when their employment ended.
Non-Qualified Deferred Compensation – 2020
| | | | Non-Qualified Deferred Compensation – 2022 |
This table provides information for 20202022 for each NEO regarding such individual’s accounts in non-qualified defined contribution plans and other deferred compensation plans as of December 31, 2020.2022. The table presents balances from both the PG&E Corporation Supplemental Retirement Savings Plan for deferrals made prior to January 1, 2005, and the PG&E Corporation 2005 Supplemental Retirement Savings Plan (together, the SRSP Plans) for deferrals made on and after January 1, 2005, and from the PG&E Corporation Defined Contribution Executive Supplemental Retirement Plan (DC-ESRP).DC-ESRP. The below descriptions pertain to 2020.| Name | | PLAN | | | Executive
Contributions
in Last FY
($)(1) | | | | Registrant
Contributions
in Last FY
($)(2) | | | | Aggregate
Earnings in
Last FY ($)(3) | | | | Aggregate
Withdrawals/
Distribution
($) | | | | Aggregate
Balance at
Last FYE
($)(4) | | | W. L. Smith | | SRSP Plans | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | DC-ESRP | | | 0 | | | | 43,750 | | | | 2,326 | | | | 0 | | | | 46,076 | | | M. A. Lewis | | SRSP Plans | | | 0 | | | | 22,260 | | | | 2,590 | | | | 0 | | | | 41,877 | | | | | DC-ESRP | | | 0 | | | | 38,646 | | | | 12,764 | | | | 0 | | | | 98,741 | | | C. A. Foster | | SRSP | | | 0 | | | | 5,175 | | | | 1,552 | | | | 0 | | | | 14,511 | | | | | DC-ESRP | | | 0 | | | | 37,338 | | | | 18,423 | | | | 0 | | | | 95,145 | | | D. S. Thomason | | SRSP Plans | | | 0 | | | | 10,328 | | | | 56,976 | | | | 0 | | | | 374,675 | | | | | DC-ESRP | | | 0 | | | | 23,764 | | | | 25,340 | | | | 0 | | | | 158,009 | | | J. R. Simon | | SRSP Plans | | | 0 | | | | 19,623 | | | | 121,405 | | | | 0 | | | | 1,987,245 | | | J. M. Welsch | | SRSP Plans | | | 0 | | | | 12,926 | | | | 4,586 | | | | 0 | | | | 45,714 | | | | | DC-ESRP | | | 0 | | | | 40,058 | | | | 19,724 | | | | 0 | | | | 270,870 | | | W. D. Johnson | | SRSP Plans | | | 0 | | | | 60,375 | | | | 0 | | | | 0 | | | | 60,375 | | | | | DC-ESRP | | | 0 | | | | 87,500 | | | | 26,573 | | | | 0 | | | | 219,982 | | | A.M. Vesey | | SRSP Plans | | | 0 | | | | 20,613 | | | | 643 | | | | 0 | | | | 27,006 | | | | | DC-ESRP | | | 0 | | | | 41,111 | | | | 9,457 | | | | 0 | | | | 77,299 | | | J. P. Wells | | SRSP Plans | | | 0 | | | | 12,295 | | | | 31,194 | | | | 0 | | | | 216,649 | | | J. C. Loduca | | SRSP Plans | | | 0 | | | | 10,327 | | | | 17,571 | | | | 0 | | | | 131,536 | |
| | | | | | | | | | | | | | | | | | | | | | Name | PLAN | Executive Contributions in Last FY($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate
Withdrawals/
Distribution
($) | Aggregate Balance at Last FYE ($)(4) | | P. K. Poppe | SRSP Plan | 0 | 76,742 | (9,897) | 0 | 134,346 | | DC-ESRP | 0 | 201,547 | (28,634) | 0 | 271,374 | | J. M. Glickman | SRSP Plan | 0 | 24,450 | (1,100) | 0 | 30,550 | | DC-ESRP | 0 | 69,980 | (9,560) | 0 | 92,757 | | M. M. Santos | SRSP Plan | 0 | 43,844 | (4,013) | 0 | 72,831 | | DC-ESRP | 0 | 95,923 | (12,720) | 0 | 130,670 | | A. L. Wright | SRSP Plan | 0 | 36,776 | (5,125) | 0 | 65,780 | | DC-ESRP | 0 | 101,212 | (15,748) | 0 | 140,690 | | C. A. Foster | SRSP Plan | 0 | 18,562 | (5,360) | 0 | 44,537 | | DC-ESRP | 0 | 71,684 | (33,829) | 0 | 197,651 | | D. S. Thomason | SRSP Plan | 100,453 | 11,780 | 12,677 | 0 | 560,303 | | DC-ESRP | 0 | 41,082 | (41,583) | 0 | 213,909 |
2021 | | | | | | | 2023 Joint Proxy Statement | 77 |
| | | | | | | | | | | | | | | | | | | | | | Name | PLAN | Executive Contributions in Last FY($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate
Withdrawals/
Distribution
($) | Aggregate Balance at Last FYE ($)(4) | | J. R. Simon | SRSP Plan | 0 | 23,168 | (34,693) | 0 | 2,118,460 | | DC-ESRP | 0 | 0 | 0 | 0 | 0 | | S. Singh | SRSP Plan | 0 | 18,375 | (1,938) | 0 | 28,681 | | DC-ESRP | 0 | 66,382 | 14,342 | 0 | 364,824 | | J. Cox | SRSP Plan | 0 | 22,975 | (4,025) | 0 | 46,400 | | DC-ESRP | 0 | 64,727 | (10,540) | 0 | 94,964 |
(1) Represents contributions made in 2022. (2) The amounts shown were earned and reported for 2022 as compensation in the Summary Compensation – 2020 (Continued)(1) | In 2020, as a result of the Chapter 11 Cases, no deferrals were allowed. | (2) | The amounts shown were earned and reported for 2020 as compensation in the Summary Compensation Table. | (3) | Represents earnings from the SRSP Plans and the DC-ESRP described below. Includes the following amounts that were reported for 2020 as compensation in the Summary Compensation Table: Mr. Simon $15,569. | (4) | Includes the following amounts that were reported as compensation in the Summary Compensation Table for 2020 and prior years: Mr. Smith (DC-ESRP) $43,750, Mr. Lewis (SRSP Plans) $39,287, Mr. Lewis (DC-ESRP) $71,886, Mr. Foster (SRSP Plans) $5,175, Mr. Foster (DC-ESRP) $37,338, Mr. Thomason (SRSP Plans) $262,177, Mr. Thomason (DC-ESRP) $114,430, Mr. Simon (SRSP Plans) $1,769,678, Mr. Welsch (SRSP Plans) $23,806, Mr. Welsch (DC-ESRP) $86,481, Mr. Johnson (SRSP Plans) $60,375, Mr. Johnson (DC-ESRP) $189,583, Mr. Vesey (SRSP Plans) $28,636, Mr. Vesey (DC-ESRP) $67,096, Mr. Wells (SRSP Plans) $158,719, and Mr. Loduca (SRSP Plans) $27,549. |
Table. (3) Represents earnings from the SRSP Plans and the DC-ESRP described below. Includes the following amounts that were reported for 2022 as compensation in the Summary Compensation Table: Mr. Simon $11,337 and Mr. Singh $3,251. (4) Includes the following amounts that were reported as compensation in the Summary Compensation Table for 2022 and prior years: Ms. Poppe (SRSP Plans) $144,242, Ms. Poppe (DC-ESRP) $295,672, Mr. Glickman (SRSP Plans) $31,650, Mr. Glickman (DC-ESRP) $101,480, Ms. Santos (SRSP Plans) $76,844, Ms. Santos (DC-ESRP) $141,956, Mr. Wright (SRSP Plans) $70,905, Mr. Wright (DC-ESRP) $154,150, Mr. Foster (SRSP Plans) $47,911, Mr. Foster (DC-ESRP) $215,405, Mr. Thomason (SRSP Plans) $397,415, Mr. Thomason (DC-ESRP) $232,419, Mr. Simon (SRSP Plans) $2,055,189, Mr. Singh (SRSP Plans) $34,318, Mr. Singh (DC-ESRP) $66,382, Mr. Cox (SRSP Plans) $22,975, Mr. Cox (DC-ESRP) $64,727. Under the SRSP Plans, officers may defer 5 percent to 75 percent of their base salary, and all or part of their perquisite allowance, STIP payment, and performance sharePSU award if settled in cash. During the pendency of the Chapter 11 Cases, no employee deferrals were allowed. Such employee deferrals resumed after the companies’ emerged from Chapter 11, starting with compensation that will be earned in 2021.PG&E Corporation also will contribute an amount equal to any employer contributions due under the 401(k) plan that were not made due to limitations under Internal Revenue Code Sections 401(m), 401(a)(17), or 415. Under the SRSP Plans, officers may elect deferrals to be distributed in 1 to 10 installments commencing in January of the year following termination of employment. For deferrals made in 2005 and thereafter, distributions may commence seven months after termination of employment or in January of a year specified by the officer. Earlier distributions may be made in the case of an officer’s death. The plan administrator may, in its discretion, permit earlier withdrawals as requested by participants to meet unforeseen emergencies. Under the DC-ESRP, each time salary or STIP is paid, PG&E Corporation credits the participant’s account with an amount equal to 7 percent of the payment. Benefits vest after three years of cumulative service with the companies, and benefits are paid in a single lump sum upon the officer’s separation from service commencing as soon as reasonably practicable, following a date seven months after the separation from service. Officers may also elect deferrals to be distributed in 2 to 10 equal annual installments. Earlier distributions may be made in the case of an officer’s death. Earnings on amounts in participant accounts under the SRSP Plans and the DC-ESRP are calculated based on the performance of the following funds available in the 401(k) plan: Fund Name | | 2020 Return | | | | | Fund Name | 2022 Return | | Bond Index Fund | | 7.64% | -13.15% | | Emerging Markets Enhanced Index Fund | | 7.48% | -17.49% | | International Stock Index Fund | | 8.05% | -14.02% | | Large Company Stock Index Fund | | 18.36% | -18.12% | | Money Market Investment Fund | | 0.47% | 1.50% | | Retirement Income Fund | | 9.74% | -10.98% | | Short Term Bond Index Fund | | 3.35% | -3.70% | | Small Company Stock Index Fund | | 32.64% | -25.46% | | Target Date Fund 2020 | | 11.15% | -12.20% | | Target Date Fund 2025 | | 15.09% | -14.83% | | Target Date Fund 2030 | | 17.58% | -17.00% | | Target Date Fund 2035 | | 18.47% | -17.84% | | Target Date Fund 2040 | | 19.02% | -18.35% | | Target Date Fund 2045 | | 19.48% | -18.75% | | Target Date Fund 2050 | | 19.92% | -19.08% | | Target Date Fund 2055 | | 19.88% | -19.10% | | Target Date Fund 2060 | | 19.89% | -19.10% | | Target Date Fund 2065 | | n/a | -19.16% | | Total US Stock Index Fund | | 20.83% | -19.09% | | U.S. Government Bond Index Fund | | 5.8% | -7.96% | | World Stock Index Fund | | 16.86% | -18.03% |
2021 | | | | | | | 2023 Joint Proxy Statement | 78 |
Non-Qualified Deferred Compensation – 2020(Continued)
Other available measures are the PG&E Corporation Phantom Stock Fund, which mirrors an investment in PG&E Corporation common stock (2020(2022 return of 14.9733.10 percent), and the AA Utility Bond Fund. The AA Utility Bond Fund accrues interest based on the long-term corporate bond yield average for AA utilities reported by Moody’s Investors Service (yields reported during 20202022 ranged from 2.303.01 percent to 3.325.82 percent). Pre-2005 deferrals under the SRSP Plans are limited to the Large Company Stock Index Fund, the PG&E Corporation Phantom Stock Fund, and the AA Utility Bond Fund. In general, the earnings measures are selected by the officer for the SRSP Plans and independent from such selections in the 401(k) plan, and may be reallocated subject to restrictions imposed by regulations of the SEC. However, deferrals of Special Incentive Stock Ownership Premiums received under the prior Executive Stock Ownership Program before December 31, 2012, may only be invested in the PG&E Corporation Phantom Stock Fund and may not be reallocated. Potential Payments upon Resignation, Retirement, Termination, Change in Control, Death, or Disability
| | | | Potential Payments Upon Resignation, Retirement, Termination, Change in Control, Death, or Disability |
The NEOs are eligible to receive certain benefits upon termination, or when a Change in Control (as defined in the Officer Severance Policy) occurs and either (1) the officer’s employment is terminated (including constructive termination by the officer for good reason) in connection with the Change in Control, or (2) the acquiring company does not continue or assume outstanding LTIP awards or substitute the LTIP awards with substantially equivalent awards. The following table estimates potential payments for each NEO as if, effective December 31, 2020,2022, that individual’s employment was terminated or an acquiror did not assume, continue, or grant substitute awards for LTIP awards previously granted by PG&E Corporation or the Utility. Estimates assume that the value of any stock-based compensation received was $12.46$16.26 per share, which was the closing price of PG&E Corporation common stock on December 31, 2020.2022. The table generally excludes (1) payments for services already rendered (such as unpaid and earned salary), which would be due to the NEO even if the individual had remained employed with the companies, (2) post-retirement benefits that would be available to employees generally, and (3) any deferred compensation that was previously earned but would become payable due to the termination (these deferred amounts are reflected in the table entitled “Non-Qualified Deferred Compensation” ) on page 70). The value of actual cash and equity received on or shortly after December 31, 2020,2022, would be less than the “total” amount listed below because (1) pension benefits are paid over time in the form of a life annuity, and (2) stock awards reflected in the table will be payable only after vesting, which may occur in subsequent years. | Name | | Resignation/
Retirement
($) | | | Termination
For Cause
($) | | | Termination
Without Cause
($) | | | Change in
Control
($)(1) | | | Death or
Disability
($)(2) | | | W. L. Smith | | | | | | | | | | | | | | | | | | | | | | Value of Accumulated Pension Benefits | | | 22,800 | | | | 22,800 | | | | 22,800 | | | | 22,800 | | | | 22,800 | | | Value of Stock Awards Vesting(3) | | | 0 | | | | 0 | | | | 1,703,880 | | | | 1,703,880 | | | | 1,703,880 | | | Severance Payment | | | 0 | | | | 0 | | | | 1,500,000 | | | | 3,000,000 | | | | 0 | | | Short-Term Incentive Plan Award(4) | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | Health Care Insurance | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | Career Transition | | | 0 | | | | 0 | | | | 19,500 | | | | 19,500 | | | | 0 | | | Total | | | 22,800 | | | | 22,800 | | | | 3,246,180 | | | | 4,746,180 | | | | 1,726,680 | | | M. A. Lewis | | | | | | | | | | | | | | | | | | | | | | Value of Accumulated Pension Benefits | | | 53,462 | | | | 53,462 | | | | 53,462 | | | | 53,462 | | | | 53,462 | | | Value of Stock Awards Vesting(3) | | | 0 | | | | 0 | | | | 329,837 | | | | 965,314 | | | | 965,314 | | | Severance Payment | | | 0 | | | | 0 | | | | 890,400 | | | | 890,400 | | | | 0 | | | Short-Term Incentive Plan Award(4) | | | 0 | | | | 0 | | | | 223,555 | | | | 223,555 | | | | 223,555 | | | Health Care Insurance | | | 0 | | | | 0 | | | | 53,968 | | | | 53,968 | | | | 0 | | | Career Transition | | | 0 | | | | 0 | | | | 19,500 | | | | 19,500 | | | | 0 | | | Total | | | 53,462 | | | | 53,462 | | | | 1,570,722 | | | | 2,206,199 | | | | 1,242,331 | |
| | | | | | | | | | | | | | | | | | | Name | Resignation / Retirement ($) | Termination For Cause ($) | Termination Without Cause ($) | Change in Control ($) | Death or Disability ($) | | Patricia K. Poppe | | | | | | | Value of Accumulated Pension Benefits | 31,467 | 31,467 | 31,467 | 31,467 | 42,188 | | Value of Stock Awards Vesting | 0 | | 37,003,312 | 48,986,469 | 48,986,469 | | Severance Payment | | | 6,580,000 | 9,870,000 | | | Short-Term Incentive Plan Award | 2,207,520 | | 2,207,520 | 2,207,520 | 2,207,520 | | Health Care Insurance | 0 | | 39,246 | 39,246 | | | Career Transition | | | 19,500 | 19,500 | | | Total | 2,238,987 | 31,467 | 45,881,045 | 61,154,202 | 51,236,177 | | Jason M. Glickman | | | | | | | Value of Accumulated Pension Benefits | 22,199 | 22,199 | 22,199 | 22,199 | 36,161 | | Value of Stock Awards Vesting | 0 | | 2,436,237 | 4,881,772 | 4,881,772 | | Severance Payment | | | 1,246,875 | 2,520,000 | | | Short-Term Incentive Plan Award | 630,392 | | 630,392 | 630,392 | 630,392 | | Health Care Insurance | 0 | | 54,199 | 54,199 | | | Career Transition | | | 19,500 | 19,500 | | | Total | 652,591 | 22,199 | 4,409,401 | 8,128,062 | 5,548,325 | | Marlene M. Santos | | | | | | | Value of Accumulated Pension Benefits | 48,215 | 48,215 | 48,215 | 48,215 | 48,215 | | Value of Stock Awards Vesting | 0 | | 5,234,079 | 8,813,294 | 8,813,294 | | Severance Payment | | | 1,646,667 | 3,325,000 | | | Short-Term Incentive Plan Award | 993,034 | | 993,034 | 993,034 | 993,034 | | Health Care Insurance | 0 | | 39,246 | 39,246 | | | Career Transition | | | 19,500 | 19,500 | | | Total | 1,041,249 | 48,215 | 7,980,741 | 13,238,289 | 9,854,543 |
2021 | | | | | | | 2023 Joint Proxy Statement | 7972 |
| | | | | | | | | | | | | | | | | | | Name | Resignation / Retirement ($) | Termination For Cause ($) | Termination Without Cause ($) | Change in Control ($) | Death or Disability ($) | | Adam L. Wright | | | | | | | Value of Accumulated Pension Benefits | 25,687 | 25,687 | 25,687 | 25,687 | 36,161 | | Value of Stock Awards Vesting | 0 | | 4,880,439 | 8,550,776 | 8,550,776 | | Severance Payment | | | 1,646,667 | 3,325,000 | | | Short-Term Incentive Plan Award | 911,040 | | 911,040 | 911,040 | 911,040 | | Health Care Insurance | 0 | | 54,199 | 54,199 | | | Career Transition | | | 19,500 | 19,500 | | | Total | 936,727 | 25,687 | 7,537,532 | 12,886,202 | 9,497,977 | | Christopher A. Foster | | | | | | | Value of Accumulated Pension Benefits | 325,396 | 325,396 | 325,396 | 325,396 | 165,060 | | Value of Stock Awards Vesting | 0 | | 2,622,291 | 4,684,929 | 4,684,929 | | Severance Payment | | | 1,134,583 | 2,292,500 | | | Short-Term Incentive Plan Award | 454,352 | | 454,352 | 454,352 | 454,352 | | Health Care Insurance | 0 | | 50,989 | 50,989 | | | Career Transition | | | 19,500 | 19,500 | | | Total | 779,748 | 325,396 | 4,607,112 | 7,827,666 | 5,304,341 | | David S. Thomason | | | | | | | Value of Accumulated Pension Benefits | 752,258 | 752,258 | 752,258 | 752,258 | 533,378 | | Value of Stock Awards Vesting | 0 | | 1,812,414 | 2,377,131 | 2,377,131 | | Severance Payment | | | 578,962 | 1,171,110 | | | Short-Term Incentive Plan Award | 202,868 | | 202,868 | 202,868 | 202,868 | | Health Care Insurance | 0 | | 33,640 | 33,640 | | | Career Transition | | | 19,500 | 19,500 | | | Total | 955,126 | 752,258 | 3,399,642 | 4,556,507 | 3,113,377 | | John R. Simon | | | | | | | Value of Accumulated Pension Benefits | 3,945,214 | 3,945,214 | 3,945,214 | 3,945,214 | 2,319,046 | | Value of Stock Awards Vesting | 5,353,003 | | 5,612,398 | 7,835,076 | 7,835,076 | | Severance Payment | | | 1,421,434 | 2,870,000 | | | Short-Term Incentive Plan Award | 725,760 | | 725,760 | 725,760 | 725,760 | | Health Care Insurance | 0 | | 54,199 | 54,199 | | | Career Transition | | | 19,500 | 19,500 | | | Payment in Lieu of Post-Retirements Life Insurance | 754,519 | 754,519 | 754,519 | 754,519 | | | Total | 10,778,496 | 4,699,733 | 12,533,024 | 16,204,268 | 10,879,882 | | Sumeet Singh | | | | | | | Value of Accumulated Pension Benefits | 627,168 | 627,168 | 627,168 | 627,168 | 318,136 | | Value of Stock Awards Vesting | 0 | | 2,656,655 | 4,537,434 | 4,537,434 | | Severance Payment | | | 1,181,250 | 2,362,500 | | | Short-Term Incentive Plan Award | 597,213 | | 597,213 | 597,213 | 597,213 | | Health Care Insurance | 0 | | 54,199 | 54,199 | | | Career Transition | | | 19,500 | 19,500 | | | Total | 1,224,381 | 627,168 | 5,135,984 | 8,198,014 | 5,452,783 | | Julius Cox | | | | | | | Value of Accumulated Pension Benefits | 29,821 | 29,821 | 29,821 | 29,821 | 42,188 | | Value of Stock Awards Vesting | 0 | | 1,540,765 | 2,930,166 | 2,930,166 | | Severance Payment | | | 1,118,542 | 2,257,500 | |
Potential Payments upon Resignation, Retirement, Termination, Change in Control, Death, or Disability(Continued)
| Name | | Resignation/
Retirement
($) | | | Termination
For Cause
($) | | | Termination
Without Cause
($) | | | Change in
Control
($)(1) | | | Death or
Disability
($)(2) | | | C. A. Foster | | | | | | | | | | | | | | | | | | | | | | Value of Accumulated Pension Benefits | | | 461,612 | | | | 461,612 | | | | 461,612 | | | | 461,612 | | | | 274,853 | | | Value of Stock Awards Vesting(3) | | | 0 | | | | 0 | | | | 156,747 | | | | 429,097 | | | | 429,097 | | | Severance Payment | | | 0 | | | | 0 | | | | 500,250 | | | | 500,250 | | | | 0 | | | Short-Term Incentive Plan Award(4) | | | 0 | | | | 0 | | | | 108,426 | | | | 108,426 | | | | 108,426 | | | Health Care Insurance | | | 0 | | | | 0 | | | | 50,487 | | | | 50,487 | | | | 0 | | | Career Transition | | | 0 | | | | 0 | | | | 19,500 | | | | 19,500 | | | | 0 | | | Total | | | 461,612 | | | | 461,612 | | | | 1,297,022 | | | | 1,569,373 | | | | 812,377 | | | D. S. Thomason | | | | | | | | | | | | | | | | | | | | | | Value of Accumulated Pension Benefits | | | 1,110,085 | | | | 1,110,085 | | | | 1,110,085 | | | | 1,110,085 | | | | 640,143 | | | Value of Stock Awards Vesting(3) | | | 0 | | | | 0 | | | | 332,470 | | | | 967,955 | | | | 967,955 | | | Severance Payment | | | 0 | | | | 0 | | | | 525,000 | | | | 525,000 | | | | 0 | | | Short-Term Incentive Plan Award(4) | | | 0 | | | | 0 | | | | 114,441 | | | | 114,441 | | | | 114,441 | | | Health Care Insurance | | | 0 | | | | 0 | | | | 53,968 | | | | 53,968 | | | | 0 | | | Career Transition | | | 0 | | | | 0 | | | | 19,500 | | | | 19,500 | | | | 0 | | | Total | | | 1,110,085 | | | | 1,110,085 | | | | 2,155,464 | | | | 2,790,949 | | | | 1,722,539 | | | J. R. Simon | | | | | | | | | | | | | | | | | | | | | | Value of Accumulated Pension Benefits | | | 3,546,668 | | | | 3,546,668 | | | | 3,546,668 | | | | 3,546,668 | | | | 2,559,967 | | | Value of Stock Awards Vesting(3) | | | 828,328 | | | | 0 | | | | 1,765,225 | | | | 4,222,893 | | | | 4,222,893 | | | Severance Payment | | | 0 | | | | 0 | | | | 1,270,990 | | | | 2,534,160 | | | | 0 | | | Short-Term Incentive Plan Award(4) | | | 439,400 | | | | 0 | | | | 439,400 | | | | 439,400 | | | | 439,400 | | | Health Care Insurance | | | 0 | | | | 0 | | | | 53,968 | | | | 53,968 | | | | 0 | | | Career Transition | | | 0 | | | | 0 | | | | 19,500 | | | | 19,500 | | | | 0 | | | Payment in Lieu of Post-Retirement Life Insurance | | | 710,402 | | | | 710,402 | | | | 710,402 | | | | 710,402 | | | | 0 | | | Total | | | 5,524,798 | | | | 4,257,070 | | | | 7,806,152 | | | | 11,526,991 | | | | 7,222,260 | | | J. M. Welsch | | | | | | | | | | | | | | | | | | | | | | Value of Accumulated Pension Benefits | | | 2,887,832 | | | | 2,887,832 | | | | 2,887,832 | | | | 2,887,832 | | | | 1,561,183 | | | Value of Stock Awards Vesting(3) | | | 539,207 | | | | 0 | | | | 539,207 | | | | 1,572,315 | | | | 1,572,315 | | | Severance Payment | | | 0 | | | | 0 | | | | 924,320 | | | | 924,320 | | | | 0 | | | Short-Term Incentive Plan Award(4) | | | 245,495 | | | | 0 | | | | 245,495 | | | | 245,495 | | | | 245,495 | | | Health Care Insurance | | | 0 | | | | 0 | | | | 39,079 | | | | 39,079 | | | | 0 | | | Career Transition | | | 0 | | | | 0 | | | | 19,500 | | | | 19,500 | | | | 0 | | | Payment in Lieu of Post-Retirement Life Insurance | | | 566,045 | | | | 566,045 | | | | 566,045 | | | | 566,045 | | | | 0 | | | Total | | | 4,238,579 | | | | 3,453,877 | | | | 5,221,478 | | | | 6,254,586 | | | | 3,378,993 | |
(1) | Payments made in connection with a Change in Control may require shareholder approval, pursuant to the PG&E Corporation Golden Parachute Restriction Policy, discussed below. If excise taxes are levied in connection with Internal Revenue Code Section 4999, the aggregate benefits shown may be reduced to a level that does not trigger the excise tax, but only if doing so would be more beneficial to the officer on an after-tax basis. | | | | (2) | For pension payments, the number reflects the value of aggregated benefits upon termination due to death. Pension payments upon termination due to disability would be the same as in the event of resignation. | (3) | Reflects the value of outstanding equity awards for which vesting is continued or accelerated due to the termination event. Based on performance through December 31, 2020, no payments would be made with respect to outstanding performance shares granted in 2018. Outstanding performance shares granted in 2020 are included assuming a target payout (100%). | (4) | Assumes 2020 STIP performance score of 0.650, and an individual performance modifier for each NEO, as determined by the Boards of PG&E Corporation and the Utility and the Compensation Committee. |
20212023 Joint Proxy Statement | 80 |
| | | | | | | | | | | | | | | | | | | Name | Resignation / Retirement ($) | Termination For Cause ($) | Termination Without Cause ($) | Change in Control ($) | Death or Disability ($) | | Short-Term Incentive Plan Award | 559,910 | | 559,910 | 559,910 | 559,910 | | Health Care Insurance | 0 | 0 | 54,199 | 54,199 | | | Career Transition | | | 19,500 | 19,500 | | | Total | 589,731 | 29,821 | 3,322,736 | 5,851,095 | 3,532,264 |
(1) Payments upon Resignation, Retirement, Termination,made in connection with a Change in Control Death,may require shareholder approval, pursuant to the PG&E Corporation Golden Parachute Restriction Policy, discussed below. If excise taxes are levied in connection with Internal Revenue Code Section 4999, the aggregate benefits shown may be reduced to a level that does not trigger the excise tax, but only if doing so would be more beneficial to the officer on an after-tax basis. (2) For pension payments, the number reflects the value of aggregated benefits upon termination due to death. Pension payments upon termination due to disability would be the same as in the event of resignation. (3) Reflects the value of outstanding equity awards for which vesting is continued or Disability(Continued)Arrangements with Former NEOs
During 2020,accelerated due to the termination event. Outstanding PSUs granted in 2021 and 2022 are included assuming a target payout (100 percent).
(4) Assumes 2022 STIP performance scores as determined by the Boards of PG&E Corporation and the Utility and the People and Compensation Committee as disclosed in the CD&A. The following NEOs separated from service prior todescribes post-service payment arrangements effective as of December 31, 2020. In each case the individual was entitled to receive benefits consistent with a termination without cause as described below. Additional benefits, if any are described below• | On August 3, 2020, Andrew Vesey entered into a separation agreement, pursuant to which his employment ceased on August 3, 2020. In addition to those benefits typically provided to an individual who was terminated without cause, Mr. Vesey also was granted a cash payment of $850,000, equivalent to his 2020 STIP target value and a cash relocation reimbursement benefit not to exceed $25,000. Mr. Vesey also waived the opportunity for a 2020 STIP payout consistent with payouts typically provided to individuals who are terminated without cause. The value of benefits received due to such separation, calculated as of August 4, 2020, in a manner consistent with the calculations for resignation in the “Potential Payments” table, was $2,887,425. | • | On August 15, 2020, Ms. Loduca entered into a separation agreement, pursuant to which her employment ceased on August 15, 2020. The value of benefits received due to such separation, calculated as of August 16, 2020, in a manner consistent with the calculations for a termination without cause in the “Potential Payments” table was $4,230,127. |
Additionally, on July2022, and does not address changes that will apply after January 1, 2020, Mr. Johnson retired from employment with P&GE Corporation. As a result, Mr. Johnson received benefits consistent with a retirement as described below. The value of benefits received due to such separation, calculated as of July 1, 2020, in a manner consistent with the calculations for resignation in the “Potential Payments” table, was $45,638.
On September 26, 2020, Mr. Wells resigned from employment with PG&E Corporation. As a result, Mr. Wells received benefits consistent with a resignation as described below. The value of benefits received due to such separation, calculated as of September 26, 2020, in a manner consistent with the calculations for resignation in the “Potential Payments” table, was $1,899,978.
2023. Pension Benefits in General If any NEO is terminated for any reason, that officer generally is entitled to receive accrued and vested pension benefits, as described in the narrative accompanying the “Pension Benefits” table.table on page 69. The value of the pension benefit will be paid out over time in the form of an annuity, consistent with payment elections made by the NEO. The qualified plan trust is funded by contributions from both PG&E Corporation and the Utility. Payments from the non-qualified plan are paid by PG&E Corporation and are reduced by any benefit payable from the qualified plan. The value of pension benefits reported in the table above is identical in all termination scenarios, except if an NEO’s employment is terminated due to that officer’s death. In that case, if (1) the officer was at least 55 years of age, or (2) the combined total of his or her age and the number of years worked exceeded 70, then the officer’s surviving spouse or beneficiary would be entitled to an immediate commencement of payment of 50 percent of the single-life pension benefit that would otherwise have been available to the officer at age 65. For all other officers, the value of this pre-retirement survivor’s benefit would be 50 percent of the single life pension benefit that would otherwise have been available to the officer at age 55, and the benefit would commence on the first of the month after the day that officer would have reached age 55. The Officer Severance Policy provides for severance payments, treatment of STIP, upon severance, and the treatment of certain LTIP awards upon termination with cause, termination without cause, and termination in connection with a Change in Control. Benefits under the Officer Severance Policy are paid by the individual’s former employer. 2021 Joint Proxy Statement | 81 |
Certain award agreements provide that if there is a conflict between it and the Officer Severance Policy than the award agreement's terms control. Potential Payments upon Resignation, Retirement, Termination, Change in Control, Death, or Disability(Continued)
Potential Payments – Resignation/Retirement Unvested performance shares,PSUs, stock options, and RSUs generally are cancelled upon resignation, unless the holder’s resignation qualifies as a “retirement.” For these purposes, “retirement” means a termination of employment, other than for cause, when an employee is at least 55 years old and has been employed for at least the last eightfive consecutive years immediately before termination (five years for awards made to prior to 2020).termination. If the holder “retires,” then: • | Unvested performance shares vest pro-rata, based on the number of months the holder was employed during the performance period. Any vested performance shares are settled, if at all, at the end of the applicable performance period, in the same manner as for active employees. | • | •Unvested PSUs vest pro-rata, based on the number of months the holder was employed during the performance period. Any vested PSUs are settled, if at all, at the end of the applicable performance period, in the same manner as for active employees. •Unvested annual RSU awards continue to vest for 12 months after retirement (unless retirement occurs within two years following a Change in Control, in which case shares underlying the RSUs vest and are paid out within 60 days following the retirement). | • | Unvested annual stock options continue to vest for 12 months after retirement and may be exercised for the shorter of the remaining term or five years (unless retirement occurs within two years following a Change in Control, in which case all options vest immediately and may be exercised for the shorter of the remaining term or five years). |
With respect to the retention award granted to Mr. Wells in August 2020, the retirement provision does not apply and unvested RSUs were cancelled atthat would have vested in the time his employment ended.
Messrs.next 12 months will vest and be paid out within 60 days following the retirement).
•Unvested annual stock options continue to vest for 12 months after retirement and may be exercised for the shorter of the remaining term or five years (unless retirement occurs within two years following a Change in Control, in which case all options vest immediately and may be exercised for the shorter of the remaining term or five years). Mr. Simon and Welsch werewas eligible for retirement under the LTIP as of December 31, 2020.2022. For 2022 STIP awards, if an NEO resigns or retires on or after December 31 of a performance year, that officer will be entitled to receive a lump-sum STIP payment for that calendar year.
| | | | | | | 2023 Joint Proxy Statement | 74 |
If an NEO resigns prior to December 31 of any calendar year, potential STIP payments for that year generally are forfeited. However, if the NEO is at least 55 years of age at the time of resignation, then potential STIP payments will be treated in the same manner as for a “retirement.” If an NEO retires before December 31 of any calendar year, then the People and Compensation Committee may, in its discretion, approve providing the retired NEO with a lump-sum STIP payment for that calendar year. Any such STIP payment generally would reflect actual earnings, and thus be prorated to reflect the amount of time the retired NEO was employed during the performance period. Any STIP payment generally would reflect the STIP performance score applicable to active employees and would be paid by the former employer at the same time as for active employees. Starting on January 1, 2023, treatment of STIP upon retirement or resignation will be different.
Post-Retirement Life Insurance Benefits Upon retirement (as defined under the qualified pension plan), all employees of PG&E Corporation, the Utility, and certain subsidiaries are eligible to receive a life insurance coverage benefit under the Post-Retirement Life Insurance Plan of Pacific Gas and Electric Company. If an employee retires at age 55 or older with at least 15 years of service (qualifying retirement) with the companies and their respective subsidiaries, the employee may qualify for a different “benefit level” and the value of the benefit may increase. Each retiree’s applicable “benefit level” is determined based on factors such as the participant’s position with the company at retirement and the date of hire or promotion. Prior to December 31, 2008, upon qualifying retirement, certain benefit levels also permitted the retiree to elect to receive the benefit in the form of a lump-sum cash payment equal to the present value of the insurance coverage benefit. Participants no longer may elect the cash payment upon retirement, but certain individuals who were employees as of December 31, 2008, and who were likely upon retirement to qualify for the benefit levels that previously offered the cash alternative were given the opportunity to make a one-time election as to whether to receive future benefits (if any) as insurance coverage or in the form of a lump-sum cash payment. Benefits are paid by the former employer. 2021 Joint Proxy Statement | 82 |
Potential Payments upon Resignation, Retirement, Termination, Change in Control, Death, or Disability(Continued)
Upon qualifying retirement, Messrs.Mr. Simon and Welsch each would receive a lump-sum cash benefit equal to the present value of a post-retirement life insurance policy with coverage equal to his last 12 months of salary. Upon qualifying for retirement, Mses. Poppe, and Santos, and Messrs. Smith, Lewis,Cox, Glickman, Wright, Foster, Thomason, and ThomasonSingh each would be entitled to receive a life insurance benefit in the amount of $50,000. Upon retirement Messrs. Wright and Thomason resigned from their roles at PG&E on July 1, 2020,February 6, 2023 and January 9, 2023, respectively, and Mr. Johnson received a life insurance benefit in the amount of $8,000.
Foster is resigning effective May 4, 2023.
Potential Payments – Termination for Cause If an officer is terminated for cause, all outstanding performance sharesPSUs and unvested RSUs are cancelled, stock options are forfeited, no severance payment is available, and the officer is not eligible to receive a STIP payment for that year. As provided in the Officer Severance Policy, in general, an officer is terminated “for cause” if the employer determines in good faith that the officer has engaged in, committed, or is responsible for: • | Serious misconduct, gross negligence, theft, or fraud against PG&E Corporation and/or the officer’s employer, | • | Refusal or unwillingness to perform his or her duties, | • | Inappropriate conduct in violation of the Corporation’s equal employment opportunity policy, | • | Conduct that reflects adversely upon, or making any remarks disparaging of, the Corporation, its Board, officers, or employees, or its affiliates or subsidiaries, | • | Insubordination, | • | Any willful act that is likely to injure the reputation, business, or business relationship of the Corporation or its subsidiaries or affiliates, or | • | Violation of any fiduciary duty, or breach of any duty of loyalty. |
• Serious misconduct, gross negligence, theft, or fraud against PG&E Corporation and/or the officer’s employer, • Refusal or unwillingness to perform his or her duties, • Inappropriate conduct in violation of the Corporation’s equal employment opportunity policy, • Conduct that reflects adversely upon, or making any remarks disparaging of, the Corporation, its Board, officers, or employees, or its affiliates or subsidiaries, • Insubordination, • Any willful act that is likely to injure the reputation, business, or business relationship of the Corporation or its subsidiaries or affiliates, or • Violation of any fiduciary duty, or breach of any duty of loyalty. Ms. Poppe’s offer letter provides that “cause” for purposes of defining eligibility for severance payments has the definition used for determining “constructive termination” in connection with a Change in Control (see discussion under “Potential Payments-Severance In Connection with a Change in Control”). With respect to vesting of LTIP awards, “cause” generally is determined in the sole discretion of PG&E Corporation, and typically includes dishonesty, a criminal offense, or violation of a work rule. Ms. Poppe’s offer letter provides that, for Ms. Poppe’s make-whole RSU award, “cause” is defined in the manner as under the Officer Severance Policy (described above). Potential Payments – Termination Without Cause Termination provisions are described in the Officer Severance Policy, and LTIP award agreements.• | Unvested performance shares generally vest proportionately based on the number of months during the performance period that the officer was employed divided by 36 months. Any vested performance sharesagreements, and individual arrangements as described below.• Unvested PSUs generally vest proportionately based on the number of months during the performance period that the officer was employed divided by 36 months. Any vested PSUs are settled, if at all, at the end of the applicable performance period, in the same manner as for active employees.
| | | | | | •2023 Joint Proxy Statement | Unvested RSUs generally continue to vest for 12 months. | • | Unvested stock options that would have vested over the 12 months following termination will continue to vest. Vested stock options may be exercised for the shorter of one year or the remaining term.75 |
• Unvested RSUs generally continue to vest for 12 months. Ms. Poppe’s make-whole RSU award will vest in full subject to execution and non-revocation of a general release of claims. • Unvested stock options that would have vested over the 12 months following termination will continue to vest. Vested stock options may be exercised for the shorter of one year or the remaining term. If the officer is at least 55 years of age with at least five years of service, his or her termination without cause is treated as a retirement under the terms of the LTIP award agreement, rather than as described in this section. (Please see the section entitled “Potential Payments—Resignation/ Retirement” for a discussion of vesting provisions.) Messrs.
Mr. Simon and Welsch werewas the only NEOsNEO eligible for retirement under the LTIP as of December 31, 2020.2022. All NEOs would be entitled to a lump-sum payment of one times annual base salary and STIP target, except Ms. Poppe who, as the PG&E Corporation CEO, would receive a lump sum payment of two times annual base salary and STIP target. 2021 Joint Proxy Statement | 83 |
Potential Payments upon Resignation, Retirement, Termination,Ms. Poppe’s offer letter also provides that “termination without cause” for Ms. Poppe includes “constructive termination” as otherwise defined in connection with a Change in Control Death, or Disability(Continued)
(see discussion under “Potential Payments-Severance In Connection with a Change in Control”). If an officer is terminated without cause before December 31 of a given year and has at least six months of service in that year, the officer is eligible to receive a prorated lump-sum STIP award for that year. Such STIP payment generally would reflect the STIP performance score applicable to active employees and would be prorated to reflect the amount of time that the officer was employed during the performance period. Payments would be paid by the former employer and at the same time as for active employees. The officer is entitled to receive a lump-sum cash payment equal to the estimated value of 18 months of COBRA premiums, based on the officer’s benefit levels at the time of termination (with such payment subject to taxation under applicable law), and a lump sum payment of $19,500 equal to the estimated reasonable value of career transition services. In consideration for severance benefits other than those relating to LTIP awards, (1) the officer agrees not to divulge any confidential or privileged information obtained during his or her employment, unless required or permitted by law, (2) the officer agrees that during a period of 12 months following severance, the officer will refrain from soliciting customers and employees, (3) the officer agrees to assist in legal proceedings as reasonably required during this period, (4) the officer must sign a release of claims, and (5) the officer must agree not to compete with the companies during the period to the extent permitted by law. Potential Payments – Severance in Connection with Change in Control Change-in-Control benefits require a “double trigger” and are not payable based on a Change-in-Control event alone. Benefits in connection with a Change in Control are provided by the Officer Severance Policy, the LTIP, and related LTIP award agreements and guidelines. Benefits may be limited by the PG&E Corporation Golden Parachute Restriction Policy, which is discussed further below. Definition of Change in Control A Change in Control occurs upon any of the following events: • | Any person or entity (excluding employee benefit plans or a plan fiduciary) becomes the direct or indirect owner of more than 30 percent of PG&E Corporation’s outstanding common stock; | • | Over any two-year period, a majority of the PG&E Corporation directors in office at the beginning of the period are no longer in office (unless each new director was elected or nominated for shareholder election by at least two-thirds of the remaining active directors who also were in office at the beginning of the period or who were elected or nominated by at least two-thirds of the active directors at the time of election or nomination); | • | Following any shareholder-approved consolidation or merger of PG&E Corporation, the former Corporation shareholders own less than 70 percent of the voting power in the surviving entity (or parent of the surviving entity); | • | Consummation of the sale, lease, exchange, or other transfer of all or substantially all of PG&E Corporation’s assets; or | • | Shareholder approval of a plan of liquidation or dissolution of PG&E Corporation. |
• Any person or entity (excluding employee benefit plans or a plan fiduciary) becomes the direct or indirect owner of more than 30 percent of PG&E Corporation’s outstanding common stock; • Over any two-year period, a majority of the PG&E Corporation directors in office at the beginning of the period are no longer in office (unless each new director was elected or nominated for shareholder election by at least two-thirds of the remaining active directors who also were in office at the beginning of the period or who were elected or nominated by at least two-thirds of the active directors at the time of election or nomination); • Following any shareholder-approved consolidation or merger of PG&E Corporation, the former Corporation shareholders own less than 70 percent of the voting power in the surviving entity (or parent of the surviving entity); • Consummation of the sale, lease, exchange, or other transfer of all or substantially all of PG&E Corporation’s assets; or • Shareholder approval of a plan of liquidation or dissolution of PG&E Corporation. Following a Change in Control, LTIP award agreements (applicable to all LTIP awards other than Ms. Poppe’s make-whole RSU award) generally accelerate or automatically vest if either (a) the successor company fails to assume, continue, or substitute previously granted awards in a manner that preserves the value of those awards, or (b) the award recipient is terminated (including constructive termination) in connection with a Change in Control during a set period of time before or after the Change in Control. Specific acceleration, vesting, and settlement provisions are as follows (subject to any delays necessary to comply with Internal Revenue Code Section 409A).
2021 | | | | | | | 2023 Joint Proxy Statement | 8476 |
| | | | Treatment of Unvested LTIP Awards Upon Termination Without Cause in Connection with a Change in Control (CIC) |
Treatment of Unvested LTIP Awards Upon Termination Without Cause in Connection with a Change in Control (CIC)
| | CIC Occurs and Acquiror Does
Not Assume, Continue, or
Grant Substitute LTIP Awards | | Termination Within
Three Months Before CIC;
Awards Are Assumed,
Continued, or Substituted | | Termination Within
Two Years After
CIC; Awards Are Assumed,
Continued, or Substituted | Performance
Shares | | Vest upon CIC, payable at end of the performance period, but based on a payout factor measuring TSR for PG&E for the period from the beginning of the performance period to the date of CIC, and assuming performance for other measures was at target | | Vest upon CIC, payable at the end of the performance period | | Vest upon termination, payable at the end of the performance period | | RSUs | | Vest upon CIC, settled under the normal schedule | | Vest upon CIC, settled under the normal schedule (includes any RSUs that would have continued to vest after termination) | | Vest upon termination, settled within 60 days | | Stock Options | | Vest upon CIC and will be cancelled in exchange for fair value | | Vest upon CIC; may be exercised within shorter of remaining term or one year | | Vest upon termination; may be exercised within shorter of remaining term or one year |
The Officer Severance Policy provides that, unless otherwise set forth in an award agreement, if an award is not assumed or continued by an acquiror, and an officer is terminated between three months before and two years after a Change in Control, all outstanding LTIP awards vest in full, all performance conditions are deemed satisfied at target, and are settled within 30 days of the change in control. The Officer Severance Policy provides enhanced Change-in-Control severance benefits to “covered officers” who are in officer compensation bands 1positions of SVP or 2.above. Such covered officers include Messrs. Smith and Simon. Messrs. Johnson, Vesey, and Wells, and Ms. Loduca were covered officers prior to the end of their employment.all NEO’s except Mr. Thomason. If Messrs. Lewis, Foster,Mr. Thomason or Welsch arewas terminated without cause in connection with a Change in Control eachprior to his resignation on January 9, 2023, he would behave been eligible for standard severance benefits as discussed in the section entitled “Potential Payments—Termination Without Cause.” If a covered officer is terminated without cause or is constructively terminated in connection withwithin three months before and two years after a Change in Control, (which includes termination prior to a Potential Change in Control, as defined in the Officer Severance Policy), the officer generally would be eligible for a lump-sum payment equal to the total of: • | Unpaid base salary earned through the termination date, | • | Any accrued but unpaid vacation pay, and | • | Two times the sum of (a) target STIP for the fiscal year in which termination occurs, and (b) the officer’s annual base salary in effect immediately before either the date of termination or the Change in Control, whichever amount is greater. |
• Unpaid base salary earned through the termination date, • Any accrued but unpaid vacation pay, and • Two times (or three times for Ms. Poppe, as PG&E Corporation CEO) the sum of (a) target STIP for the fiscal year in which termination occurs, and (b) the officer’s annual base salary in effect immediately before either the date of termination or the Change in Control, whichever amount is greater. However, in connection with the elimination of reimbursement payments for excise taxes levied in connection with Internal Revenue Code Section 4999, eligible officers either (1) are responsible for paying any such excise taxes, or (2) have their aggregate Change-in-Control benefits reduced to a level that does not trigger the excise tax, but only if doing so would be more beneficial to the officer on an after-tax basis. For these purposes, “cause” means: • | The covered officer’s willful and continued failure to substantially perform the officer’s duties with PG&E Corporation or one of its affiliates, after a written Board demand for substantial performance is delivered to the officer, or | • | The willful engagement in illegal conduct or gross misconduct that is materially injurious to PG&E Corporation. |
• The covered officer’s willful and continued failure to substantially perform the officer’s duties with PG&E Corporation or one of its affiliates, after a written Board demand for substantial performance is delivered to the officer, or • The willful engagement in illegal conduct or gross misconduct that is materially injurious to PG&E Corporation. Constructive termination includes resignation in connection with conditions that constitute Good Reason as defined in the Officer Severance Policy (which includes, among other things, a material diminution in duties, authority, or base compensation). 2021 Joint Proxy Statement | 85 |
Treatment of Unvested LTIP Awards Upon Termination Without Cause in Connection with a Change in Control (CIC)(Continued)
STIP
If a covered officer (Messrs. Smith or Simon)(all NEOs except Mr. Thomason) is terminated without cause or is constructively terminated in connection with a Change in Control, the Officer Severance Policy provides that the officer will receive a lump-sum payment equal to the officer’s prorated target STIP calculated for the fiscal year in which termination occurs. If another officer (Messrs. Lewis, Foster,Mr. Thomason or Welsch) iswas terminated in connection with a Change in Control eachprior to his resignation on January 9, 2023, he would behave been eligible for STIP payments consistent with the discussion in the section entitled “Potential Payments—Termination Without Cause.”Cause” on page 75.
Miscellaneous Benefits The officer is entitled to receive a lump-sum cash payment equal to the estimated value of 18 months of COBRA premiums, based on the officer’s benefit levels at the time of termination (with such payment subject to taxation under applicable law), and a lump sum payment of $19,500 equal to the estimated reasonable value of career transition services.
| | | | | | | 2023 Joint Proxy Statement | 77 |
Covenants In consideration for severance benefits other than those relating to LTIP awards, (1) the officer agrees not to divulge any confidential or privileged information obtained during his or her employment, unless required or permitted by law, (2) the officer agrees that during a period of 12 months following severance, the officer will refrain from soliciting customers and employees, (3) the officer agrees to assist in legal proceedings as reasonably required during this period, (4) the officer must sign a release of claims, and (5) the officer must agree not to compete with the companies during the period to the extent permitted by law. PG&E Corporation Golden Parachute Restriction Policy The Golden Parachute Restriction Policy requires shareholder approval of executive severance payments provided in connection with any change in control, to the extent that those payments exceed 2.99 times the sum of a covered officer’s base salary and target annual bonus. This Policy was adopted by the PG&E Corporation Board in February 2006. The policy applies to the value of cash, special benefits, or perquisites that are due to the executive following or in connection with both (1) a change in control, and (2) the termination or constructive termination of an officer of PG&E Corporation, the Utility, or their respective subsidiaries at the level of Senior Vice PresidentSVP or higher. It does not apply to the value of benefits that would be triggered by a change in control without severance, or to the value of benefits that would be triggered by severance in the absence of a change in control. The Golden Parachute Restriction Policy also does not apply to certain enumerated payments, including, among others, compensation for services rendered prior to termination, tax restoration payments, and accelerated vesting or settlement of equity awards. Potential Payments – Termination Due to Death or Disability If an officer’s employment is terminated due to death or disability, LTIP awards are treated as follows: • | Unvested performance shares vest immediately. Vested shares are payable, if at all, as soon as practicable after completion of the performance period relevant to the performance shares, in the same manner as for active employees. | • | If a participant’s death or disability (as defined under Internal Revenue Code Section 409A) occurs while employed, unvested RSUs vest immediately and will be settled within 60 days. | • | If a participant’s death or disability (as defined under Internal Revenue Code Section 409A) occurs while employed, unvested stock options vest immediately. Vested stock options may be exercised within the shorter of one year or the remaining term. |
• Unvested PSUs vest immediately. Upon death, vested shares are payable immediately at target. Upon termination due to disability, vested shares are payable, if at all, as soon as practicable after completion of the performance period relevant to the PSUs, in the same manner as for active employees. • If a participant’s death or disability (as defined under Internal Revenue Code Section 409A) occurs while employed, unvested RSUs vest immediately and will be settled within 60 days. Ms. Poppe's make-whole RSU award will vest in full subject to execution and non-revocation of a general release of claims. • If a participant’s death or disability (as defined under Internal Revenue Code Section 409A) occurs while employed, unvested stock options vest immediately. Vested stock options may be exercised within the shorter of one year or the remaining term. Vested LTIP awards are payable to the officer’s designated beneficiary(ies) in the case of death, or otherwise in accordance with the officer’s instructions or by law. If an officer’s employment is terminated due to death or disability before December 31 of the STIP performance year, a prorated portion of the target STIP award will become payable to the officer, or, in the case of death, to the officer’s beneficiary(ies), by the former employer and at the same time as STIP payments are made to active employees. 2021 Joint Proxy Statement | 86 |
| | | | Principal Executive Officers’ (PEO) Pay Ratio – 2022 |
Principal Executive Officers’ (PEO) Pay Ratio – 2020
The PG&E Corporation PEO’s 20202022 total compensation was $6,918,533.$14,120,593. The total compensation of the median employee was $220,954.$177,477. The ratio of PEO pay to median worker pay for PG&E Corporation was 31:80:1. The Utility PEO’s 20182022 total compensation was $2,642,211.$4,272,466. The total compensation of the median employee was $220,954.$177,477. The ratio of PEO pay to median worker pay for the Utility was 12:24:1. December 31, 2020,2022 was selected as the date to identify the “median employee.” The companies identified the same individual as was identified as the “median employee” on December 31, 2020, for purposes of disclosures in the 2021 Joint Proxy Statement, given that since December 31, 2020, there have been no changes to either company’s employee population or employee compensation arrangements that would result in significant changes to the pay ratio disclosure. To identify the median employee“median employee” on December 31, 2020, Medicare wages from tax records were usedutilized to make the initial identification. At that time, of the companies’ total of approximately 24,00026,000 employees, an insignificant number (9) were employed by PG&E Corporation, so the same employee was used as the median employee“median employee” for both PG&E Corporation and the Utility.Utility in 2020 and 2021. After identifying the median employee, all the elements of compensation, including cash compensation and change in pension value, for 20202021 were combined in accordance with the requirements of Item 402(c)(2)(x) of SEC Regulation S-K. As of December 31, 2020, Mr. Smith2022, Ms. Poppe was PEO of PG&E Corporation. Because Mr. Smith was only employed for part of 2020 as PEO, Mr. Smith’s compensation, specifically salary, was annualized to project the amount of compensation that would have been earned if Mr. Smith had been in his position for the full year.As of December 31, 2020,2022, Mr. Lewis was PEOWright, Mr. Glickman, and Ms. Santos were PEOs of the Utility. Because Mr. LewisThe calculated Utility PEO total compensation was only employed for partan average of 2020 as PEO, Mr. Lewis’ compensation, specifically salary, wasthese annualized to project the amount of compensation that would have been earned if Mr. Lewis had been in his position for the full year.amounts. These ratios are reasonable estimates calculated in a manner consistent with Item 402(u) of Regulation S-K.
2021 | | | | | | | 2023 Joint Proxy Statement | 8778 |
2022 Pay Versus Performance Tables and Supporting Narrative
The following tables and supporting narrative contain information regarding Compensation Actually Paid (“CAP”) to our NEOs and the relationship to company performance. Pay Versus Performance Tables ("PVP") | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Corporation PEOs/NEOs (1) | | Year | SCT Total
for PEO #1 | CAP
to PEO #1 | SCT Total for PEO #2 | CAP
to PEO #2 | SCT Total for PEO #3 | CAP
to PEO #3 | ASCT Total for
Non-PEO
NEOs | ACAP
to Non-PEO
NEOs | Value of Initial Fixed $100 Investment Based On: | Net
Income
($mm) | Non-GAAP Core EPS (3) | | TSR | Peer Group TSR (2) | | (a) | (b) | (c) | (b) | (c) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2022 | 14,120,593 | 27,957,759 | Not NEO | Not NEO | Not NEO | Not NEO | 3,067,616 | 5,085,528 | 150 | 121 | 1,800 | $1.10 | | 2021 | 51,198,471 | 55,405,829 | 361,605 | 159,676 | Not NEO | Not NEO | 3,087,062 | 2,871,276 | 112 | 119 | (102) | $1.00 (4) | | 2020 | Not NEO | Not NEO | 6,174,215 | 4,651,661 | 1,755,742 | (3,237,850) | 3,471,807 | 2,474,226 | 115 | 102 | (1,318) | $1.61 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Utility PEOs/NEOs(1) | | Year | SCT Total
for PEO #1 | CAP
to PEO #1 | SCT Total for PEO #2 | CAP
to PEO #2 | SCT Total for PEO #3 | CAP
to PEO #3 | SCT Total for PEO #4 | CAP
to PEO #4 | SCT Total for PEO #5 | CAP
to PEO #5 | SCT Total for PEO #6 | CAP
to PEO #6 | ASCT Total for
Non-PEO
NEOs | ACAP
to Non-PEO
NEOs | Value of Initial Fixed $100 Investment Based On: | Net
Income
($mm) | Non-GAAP Core EPS (3) | | TSR | Peer Group TSR (2) | | (a) | (b) | (c) | (b) | (c) | (b) | (c) | (b) | (c) | (b) | (c) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2022 | Not NEO | Not NEO | Not NEO | Not NEO | Not NEO | Not NEO | 3,319,458 | 4,773,078 | 4,788,022 | 7,257,976 | 4,709,917 | 7,133,196 | 2,150,866 | 3,626,099 | 150 | 121 | 1,800 | $1.10 | | 2021 | 1,619,095 | 1,630,236 | Not NEO | Not NEO | Not NEO | Not NEO | 3,074,861 | 3,147,964 | 7,484,086 | 7,525,239 | 6,508,160 | 6,875,783 | 1,503,306 | 1,434,284 | 112 | 119 | (102) | $1.00 (4) | | 2020 | Not NEO | Not NEO | 2,082,421 | 1,712,587 | 3,630,569 | 3,791,428 | Not NEO | Not NEO | Not an NEO | Not NEO | Not an NEO | Not NEO | 1,943,221 | 2,183,674 | 115 | 102 | (1,318) | $1.61 |
| | | | | | | | | | Legend | | 1) SCT | – | Summary Compensation Table | | 2) ASCT | – | Average Summary Compensation Table | | 3) CAP | – | Compensation Actually Paid | | 4) ACAP | – | Average Compensation Actually Paid | | 5) TSR | – | Total Shareholder Return | | 6) EPS | – | Earnings Per Share |
(1) The following individuals are included as PEOs and the non-PEO NEOs in the tables above.
| | | | | | | | | | | | | | | | Year | Corporate PEOs | Utility PEOs | Corporate Non-PEO NEOs | Utility Non-PEO NEOs | | 2022 | #1 - Patricia K. Poppe | #4 - Jason M. Glickman | Christopher A. Foster | David S. Thomason | | #5 - Marlene M. Santos | John R. Simon | Sumeet Singh | | #6 - Adam L. Wright | Julius Cox | | | 2021 | #1 - Patricia K. Poppe | #1 - Sumeet Singh | Christopher A. Foster | David S. Thomason | | #2 - William L. Smith | #4 - Jason M. Glickman | John R. Simon | James M. Welsch | | #5 - Marlene M. Santos | | | | #6 - Adam L. Wright | | | | 2020 | #2 - William L. Smith | #2 - Michael A. Lewis | Christopher A. Foster | David S. Thomason | | #3 - William D. Johnson | #3 - Andrew M. Vesey | John R. Simon | James M. Welsch | | | Jason P. Wells | | | | Janet C. Loduca | |
(2) Dow Jones Utility Index is used to determine the peer group for TSR purposes in the PVP and is used for purposes of the performance graph in PG&E CORPORATION PROPOSAL TO APPROVE THECorporation's annual report. (3) Non-GAAP Core EPS is identified as our company-selected measure and included in column (i) of both tables. Details of the reconciliation to our audited financial statements can be found in Exhibit A of the Proxy for each respective year. (4) Non-GAAP Core EPS for the full year 2021 was $1.00 per share on a fully diluted basis and $1.08 using a basic share count. The impact of dilution was $(0.08) per share. (5) The following adjustments were made to the SCT total pay in determining CAP. No deductions were required in respect of stock options as none were granted and included in the SCT during 2020 – 2022.
| | | | | | | 2023 Joint Proxy Statement | 80 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Deductions from SCT Total Pay | Additions to SCT Total Pay | | | PEO | Year | SCT Total ($) | Amounts Reported in the Summary Compensation Table for Stock Awards ($) | Amounts Reported in the Summary Compensation Table for Pension Value ($) | Fair Value of Equity Awards Calculated in Accordance with Compensation Actually Paid Requirements (a) | Value of Service Cost and Prior Service Cost under the Pension Plans | CAP ($) | | Poppe, P | 2022 | 14,120,593 | 10,069,628 | 13,269 | 23,920,063 | - | 27,957,759 | | 2021 | 51,198,471 | 41,175,002 | 18,198 | 45,400,558 | - | 55,405,829 | | 2020 | - | - | - | - | - | - | | Smith, W | 2022 | - | - | - | - | - | - | | 2021 | 361,605 | 139,994 | 9,281 | (52,654) | - | 159,676 | | 2020 | 6,174,215 | 5,105,000 | 21,354 | 3,603,800 | - | 4,651,661 | | Johnson, W | 2022 | - | - | - | - | - | - | | 2021 | - | - | - | - | - | - | | 2020 | 1,755,742 | - | 23,238 | (4,970,354) | - | (3,237,850) | | Singh, S | 2022 | - | - | - | - | - | - | | 2021 | 1,619,095 | 715,045 | 46,269 | 701,771 | 70,684 | 1,630,236 | | 2020 | - | - | - | - | - | - | | Lewis, M | 2022 | - | - | - | - | - | - | | 2021 | - | - | - | - | - | - | | 2020 | 2,082,421 | 699,993 | 22,011 | 336,723 | 15,447 | 1,712,587 | | Vesey, A | 2022 | - | - | - | - | - | - | | 2021 | - | - | - | - | - | - | | 2020 | 3,630,569 | - | 24,480 | 185,339 | - | 3,791,428 | | Glickman, J | 2022 | 3,319,458 | 1,854,956 | 8,826 | 3,317,402 | - | 4,773,078 | | 2021 | 3,074,861 | 1,750,021 | 13,373 | 1,836,497 | - | 3,147,964 | | 2020 | - | - | - | - | - | - | | Santos, M | 2022 | 4,788,022 | 2,755,918 | 16,727 | 5,242,599 | - | 7,257,976 | | 2021 | 7,484,086 | 5,113,471 | 22,292 | 5,176,916 | - | 7,525,239 | | 2020 | - | - | - | - | - | - | | Wright, A | 2022 | 4,709,917 | 2,755,918 | 11,992 | 5,191,189 | - | 7,133,196 | | 2021 | 6,508,160 | 4,200,016 | 13,695 | 4,581,334 | - | 6,875,783 | | 2020 | - | - | - | - | - | - | | Average for non-PEO Corporate NEOs | 2022 | 3,067,616 | 1,678,287 | 4,365 | 3,567,165 | 133,399 | 5,085,528 | | 2021 | 3,087,062 | 1,540,053 | 293,455 | 1,413,061 | 204,662 | 2,871,276 | | 2020 | 3,471,807 | 1,906,251 | 386,838 | 1,157,051 | 138,457 | 2,474,226 | | Average for non-PEO Utility NEOs | 2022 | 2,150,866 | 1,139,490 | - | 2,546,094 | 68,630 | 3,626,099 | | 2021 | 1,503,306 | 557,548 | 69,812 | 508,090 | 50,247 | 1,434,284 | | 2020 | 1,943,221 | 918,999 | 293,287 | 1,390,902 | 61,837 | 2,183,674 |
(a) The following elements comprise the equity fair values included in CAP.
| | | | | | | 2023 Joint Proxy Statement | 81 |
| | | | | | | | | | | | | | | | | | | | | | | | | PEO | Year | Addition of fair value at fiscal year (FY) end, of equity awards granted during the FY that remained outstanding | Addition of fair value at vesting date, of equity awards granted during the FY that vested during the FY | Addition of change in fair value at FY end versus prior FY end for awards granted in prior FY that remained outstanding | Addition of change in fair value at vesting date versus prior FY end for awards granted in prior FY that vested during the FY | Deduction of the fair value at the prior FY end for awards granted in prior FY that failed to meet their vesting conditions | Total Equity Adjustments Reflected in CAP | | Poppe, P | 2022 | 14,233,562 | 9,320,800 | 365,701 | - | - | 23,920,063 | | 2021 | 45,400,558 | - | - | - | - | 45,400,558 | | 2020 | - | - | - | - | - | - | | Smith, W | 2022 | - | - | - | - | - | - | | 2021 | 163,417 | - | (216,071) | - | - | (52,654) | | 2020 | 1,703,889 | - | (21,396) | 1,921,306 | - | 3,603,800 | | Johnson, W | 2022 | - | - | - | - | - | - | | 2021 | - | - | - | - | - | - | | 2020 | - | - | 678,492 | - | (5,648,846) | (4,970,354) | | Singh, S | 2022 | - | - | - | - | - | - | | 2021 | 778,492 | (76,721) | - | - | - | 701,771 | | 2020 | - | - | - | - | - | - | | Lewis, M | 2022 | - | - | - | - | - | - | | 2021 | - | - | - | - | - | - | | 2020 | 354,195 | (1,626) | (5,291) | - | (10,555) | 336,723 | | Vesey, A | 2022 | - | - | - | - | - | - | | 2021 | - | - | - | - | - | - | | 2020 | - | - | 272,331 | - | (86,993) | 185,339 | | Glickman, J | 2022 | 2,622,031 | 695,372 | - | - | - | 3,317,402 | | 2021 | 1,836,497 | - | - | - | - | 1,836,497 | | 2020 | - | - | - | - | - | - | | Santos, M | 2022 | 3,895,539 | 1,414,932 | (67,873) | - | - | 5,242,599 | | 2021 | 5,176,916 | - | - | - | - | 5,176,916 | | 2020 | - | - | - | - | - | - | | Wright, A | 2022 | 3,895,539 | 1,356,907 | (61,258) | - | - | 5,191,189 | | 2021 | 4,581,334 | - | - | - | - | 4,581,334 | | 2020 | - | - | - | - | - | - | | Average for non-PEO Corporate NEOs | 2022 | 2,372,300 | 1,209,779 | (14,913) | - | - | 3,567,165 | | 2021 | 1,672,595 | (132,142) | (127,392) | - | - | 1,413,061 | | 2020 | 1,212,470 | (6,182) | 55,438 | - | (104,674) | 1,157,051 | | Average for non-PEO Utility NEOs | 2022 | 1,610,692 | 938,140 | (2,738) | - | - | 2,546,094 | | 2021 | 620,141 | (108,472) | (3,579) | - | - | 508,090 | | 2020 | $ | 1,395,070 | $ | (3,825) | $ | 15,963 | $ | — | $ | (16,305) | $ | 1,390,902 |
| | | | | | | 2023 Joint Proxy Statement | 82 |
Compensation Actually Paid Versus Company Performance
The following charts provide a clear, visual comparison, for each of 2022, 2021, and 2020, between SCT paid to our PEOs, CAP to our PEOs, the average SCT paid to our non-PEO NEOs, and CAP to our non-PEO NEOs, to PG&E’s TSR and the peer group’s TSR for each of those years. In addition, the charts illustrate how PG&E’s TSR compares to our PVP peer group’s TSR.
| | | | | | | 2023 Joint Proxy Statement | 83 |
TSR is used as a performance measure in our LTIP program, applicable to PSUs, but the peer group of companies against which LTIP TSR performance is compared and the calculation for determining the LTIP TSR performance score are different than what is shown in the above charts. Additionally, TSR has a 15 percent weighting in our LTIP and, accordingly, it has limited impact on the CAP. However, as LTIP awards make up a large portion of total compensation, it is a factor that impacts the value of outstanding and vested awards and thereby the CAP. Our company-selected measure is non-GAAP Core EPS, which accounts for 25 percent of the outcome under our STIP. Given the relatively small weight of this measure in our incentive framework, non-GAAP Core EPS has a very limited relationship with CAP. We do not use GAAP net income in our incentive plans, although it is a component of non-GAAP Core EPS. Accordingly, net income, like non-GAAP Core EPS, has a very limited relationship with CAP. As discussed in our Compensation Discussion & Analysis. While financial measures are not heavily weighted, PG&E CORPORATION 2021 LONG-TERM INCENTIVE PLANTo Be Votedemphasizes many quantifiable non-financial performance measures in our incentive plans, based on byoperational customer and safety metrics. Details of these can be found in the Compensation Discussion & Analysis.
Tabular List of Company Performance Measures For the fiscal year ending December 31, 2022, non-GAAP Core EPS is the most important financial performance measure in linking CAP to PG&E Corporation Shareholders OnlyPG&E Corporation management requests thatCorporate and Utility’s performance and is included in the shareholders of PG&E Corporation approve the PG&E Corporation 2021 Long-term Incentive Plan (“2021 LTIP”) described below.PVP tables. The 2021 LTIP will become effective upon the later of approval by PG&E Corporation’s shareholders or June 1, 2021 (“Effective Date”).
The PG&E Corporation Board of Directors has unanimously approved the 2021 LTIP to replace the current PG&E Corporation 2014 Long-term Incentive Plan (“2014 LTIP”). Subject to shareholder approvalother two most important measures for PVP purposes consists of the proposed 2021 LTIP and upon the Effective Date, no new awards will be granted pursuant to the 2014 LTIP.
remaining financial measures identified in our Compensation Discussion & Analysis for 2022. The following is a summarytable lists the collective ‘most important’ financial measures alphabetically.
| | | | Tabular List of Most Important Measures | | (1) Greater affordability for customers | | (2) Non-GAAP Core EPS | | (3) Relative TSR |
| | | | | | | 2023 Joint Proxy Statement | 84 |
Proposal 3: Advisory Vote on the Frequency of the principal features of the 2021 LTIP. This summary, however, does not purportAdvisory Vote to be a complete description of all of the provisions of the 2021 LTIP. It is qualified in its entirety by reference to the full text of the 2021 LTIP. A copy of the 2021 LTIP is attached to this Proxy Statement as Appendix A, and shareholders are urged to read the 2021 LTIP in its entirety.Purpose
The purpose of the 2021 LTIP is to advance the interests ofApprove Executive Compensation for PG&E Corporation and its shareholders by providing key management employees, nonemployee directors, and other eligible participants with stockbased financial incentives to align participants’ interests with the interests of PG&E Corporation’s shareholders in the long-term success of PG&E Corporation.
The adoption of the 2021 LTIP was recommended by the PG&E Corporation Compensation Committee (“Committee”), which is composed entirely of independent directors, as defined in PG&E Corporation’s Corporate Governance Guidelines. The Board has delegated administration of the 2021 LTIP to the Committee.
Request for Shares, Dilution and Overhang
In order to give PG&E Corporation the flexibility to responsibly address its future equity compensation needs, we are requesting that shareholders approve the 2021 LTIP, under which 44 million shares (plus any shares authorized but not covered by an award under the 2014 LTIP as of the effective date of the 2021 LTIP) are authorized for issuance under the plan. The closing price of a share of PG&E Corporation common stock on December 31, 2020 was $12.46.
When considering the number of shares to reserve for issuance under the 2021 LTIP, the Committee reviewed, among other things, the potential dilution to PG&E Corporation’s current shareholders as measured by burn rate and overhang, projected future share usage, and projected future forfeitures. The projected future usage of shares for long-term incentive awards under the 2021 LTIP was reviewed under scenarios based on a variety of assumptions. Depending on assumptions, the number of shares under the 2021 LTIP, in combination with the shares added back to the plan from forfeitures of awards granted under the 2021 LTIP and added to the plan from forfeitures of awards granted under the 2014 LTIP, is expected to satisfy PG&E Corporation’s and the Pacific Gas and Electric Company’s (“Utility”) equity compensation needs through at least the 2026 annual meeting of shareholders. The Committee is committed to effectively managing the number of shares reserved for issuance under the 2021 LTIP while minimizing shareholder dilution.
2021 Joint Proxy Statement | 88 |
Company | | | | | | | | | | | | | Board Recommendation | | What are you voting on? PG&E Corporation and the Utility each asks its respective shareholders to approve, on an advisory basis, that the frequency of the advisory vote to approve executive compensation be one year. | | Vote "FOR ONE YEAR" | | | | | |
Types of Incentive Awards
Under the 2021 LTIP, the Committee has discretion to grant options, stock appreciation rights, restricted stock awards, performance shares, performance units, restricted stock units, deferred compensation awards, and other stock-based awards as described below. The stock options may be incentive stock options (“ISOs”) intended to qualify for special tax treatment or non-qualified stock options (“NQSOs”). SARs may be freestanding or granted in relation to a stock option as a tandem SAR. In addition, non-employee directors are eligible to receive automatic awards (see “Automatic Awards for Non-Employee Directors” below) as well as discretionary awards.
Except with respect to awards to non-employee directors, the type of incentive award being granted, as well as the terms and conditions of the award, is determined by the Committee at the time of grant, consistent with any restrictions in the 2021 LTIP.
Specific awards will be reflected in an applicable agreement between PG&E Corporation and the participant. Those awards will be subject to all applicable terms and conditions of the 2021 LTIP, and also may be subject to any other terms and conditions consistent with the 2021 LTIP, including accelerated vesting or settlement in the event of a participant’s death, disability, or a termination of employment. The provisions of the various agreements entered into under the 2021 LTIP do not need to be identical.
Eligibility
All employees (including officers) of PG&E Corporation, its subsidiaries, and affiliates are eligible to participate in the 2021 LTIP. Consultants are also eligible to receive incentive awards under the 2021 LTIP. Non-employee directors of PG&E Corporation are eligible to receive automatic awards and discretionary awards. Under certain circumstances, prospective employees, directors, and consultants are also eligible for awards.
As of March 22, 2021, there were 15 current or former officers of PG&E Corporation, 49 current or former officers of PG&E Corporation subsidiaries (who are not also officers of PG&E Corporation), 948 current or former employees of PG&E Corporation and its subsidiaries (who are not officers), and 14 current or former non-employee directors of PG&E Corporation participating in the 2014 LTIP.
Administration
The Committee will administer the 2021 LTIP. Among other powers, the Committee generally will have the power to:
• | Determine the eligible participants who will be granted incentive awards, | • | Determine the amount and type of award, | • | Determine the applicable fair market value of PG&E Corporation common stock, | • | Determine the terms and conditions of awards, | • | Construe and interpret the 2021 LTIP, and | • | Make all other determinations relating to the 2021 LTIP, to the extent permitted by applicable law and subject to certain restrictions specified in the 2021 LTIP. |
The Board of Directors also may delegate to the PG&E Corporation CEO the authority to make awards to certain eligible participants within the guidelines adopted by the Committee. The Committee may delegate authority to the CEO or the senior officer responsible for human resources with respect to ministerial matters.
Automatic awards to non-employee directors of PG&E Corporation will be made strictly in accordance with the terms and conditions specified in the 2021 LTIP, and discretionary awards, if any, to non-employee directors will be approved by the PG&E Corporation Board.
Effective Date and Duration of the 2021 LTIP
The 2021 LTIP will become effective upon approval by PG&E Corporation shareholders, and will have a term of 10 years from shareholder approval, unless it is terminated sooner according to the terms of the 2021 LTIP. ISOs may only be granted within 10 years of the date that the PG&E Corporation Board approved the 2021 LTIP.
2021 Joint Proxy Statement | 89 |
Shares Subject to the 2021 LTIP
Subject to adjustment for certain events affecting the stock of PG&E Corporation (such as stock splits, stock dividends, or similar events), a maximum of 44 million shares of PG&E Corporation common stock, plus any shares authorized but not covered by an award under the 2014 LTIP as of the effective date of the 2021 LTIP, will be reserved for use under the 2021 LTIP. Shares subject to awards (including, after the effective date, those outstanding under the 2014 LTIP) that expire or are terminated or cancelled without being exercised or settled in full, or are forfeited, or repurchased generally can be added back into the 2021 LTIP and become available for issuance, subject to several limitations. Upon the exercise of an SAR (or, after the effective date, exercise of an SAR granted under the 2014 LTIP), the gross number of shares for which the SAR is exercised shall be deemed issued and shall not again be available for issuance under the 2021 LTIP. Awards under the 2021 LTIP (or, after the effective date, awards under the 2014 LTIP) that are settled in cash (other than stock options or SARs) will not be considered issued shares under the 2021 LTIP and shall again be available for issuance under 2012 LTIP. If a participant exercises any award (including, after the effective date, any option or award under the 2014 LTIP) by tendering shares or by allowing the company to withhold shares, or if withholding tax liabilities are satisfied by the tendering or withholding of shares, then those tendered or withheld shares may be added back to the 2021 LTIP (other than in the case of shares tendered or withheld in connection with the exercise of stock options or SARs).
The information included in this Proxy Statement and PG&E Corporation’s and the Utility’s Annual Report on Form 10-K for fiscal year ending December 30, 2020, is updated by the following information regarding all existing equity compensation plans as of March 8, 2021:
Number of shares that will be authorized for future grant after shareholder approval of the PG&E Corporation 2021 Long Term Incentive Plan | | | 44,000,000 | | Number of shares remaining available for future grant under the 2014 Plan(1) | | | 17,010,516 | | Number of shares relating to outstanding stock options at March 8,2021(2) | | | 2,261,636 | | Total number of shares outstanding at March 8, 2021, relating to full value awards (including | | | 30,172,973 | | phantom stock units, restricted stock units, and stock settled performance shares)(3) | | | | | Weighted average remaining term of outstanding options | | | 3.65 | | Weighted average exercise price of outstanding options | | | $40.07 | | Total shares of common stock outstanding (as of March 22, 2021) | | | 1,985,105,703 | |
(1) | The number of shares remaining available for future grant under the 2014 Plan reflects performance shares at maximum payout. Only the number of shares remaining available for future grant under the 2014 Plan as of the effective date will be transferred to the 2021 LTIP. | (2) | No stock appreciation rights were outstanding as of March 8, 2021. | (3) | Outstanding shares as of March 8, 2021, includes 20,625,688 performance shares counted at maximum payout. When counted at target, the number of performance shares outstanding is 8,620,903. |
To the extent permitted by stock exchange regulations, awards granted or shares issued by PG&E Corporation in assumption of, or in substitution or exchange for, prior awards or obligations of any company acquired by or combined with PG&E Corporation or its subsidiaries shall not be added to or reduce the maximum limit on shares reserved under the 2021 LTIP. In the event that a company acquired by or combined with PG&E Corporation or any of its subsidiaries has shares available under a preexisting plan approved by shareholders that was not adopted in contemplation of the acquisition or combination, to the extent permitted by stock exchange regulations, the shares available for grant under that preexisting plan (as adjusted to reflect the acquisition or combination) may be used for awards under the 2021 LTIP, and shall not reduce or be added back to the shares authorized for grant under the 2021 LTIP. However, awards using such shares that are available under any such preexisting plan (1) shall not be made after the date awards or grants could have been made under the terms of the preexisting plan, absent the acquisition or combination, and (2) shall only be made to individuals who were not employees or directors of PG&E Corporation or its subsidiaries prior to the acquisition or combination.
In general, equity-based awards provided under the 2021 LTIP will have a minimum vesting period of one year from the date of grant, with no vesting prior to the first anniversary of the grant date, subject to certain exceptions. The Committee may grant awards with shorter vesting periods that cover up to five percent (5%) of the total number of shares of authorized under the 2021 LTIP, and certain exceptions apply to awards granted to a non-employee director to reflect the need for reelection to the Boards. Further, the Committee may provide in an award agreement or following the time of grant that the vesting of an award shall accelerate in the event of the participant’s death, disability, retirement, or a termination of service other than for cause.
The maximum aggregate value of equity and cash-based awards granted to any non-employee director of PG&E Corporation during any calendar year shall not exceed $750,000 (“Annual Limit”), except that, in the case of a non-employee director of PG&E Corporation who is serving as Chairman of the Board the Annual Limit shall be
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increased by 200 percent. The value of an equity-based award shall be based on the award’s grant date fair value as determined under applicable accounting standards.
The Committee monitors the PG&E Corporation burn rate to help ensure that share usage does not exceed competitive levels.
Restricted Stock and Restricted Stock Units
The Committee may grant awards in the form of restricted stock, restricted stock units (RSUs), or both.
Restricted Stock. Restricted stock includes shares of PG&E Corporation common stock that may be subject to vesting, transfer, and other restrictions, or performance goals. Restricted stock may be issued under the 2021 LTIP with or without requiring cash consideration.
Unless otherwise provided in the LTIP and applicable award agreement, the holders of restricted stock awarded under the 2021 LTIP shall have the same voting, and other rights as PG&E Corporation’s other shareholders.
Restricted Stock Units. RSUs are a bookkeeping entry representing a right to receive a number of shares or payment equal to the value of a number of shares of PG&E Corporation common stock, as awarded under the 2021 LTIP. RSUs may be subject to vesting, performance, or other conditions as may be established by the Committee.
Each vested restricted stock unit may be settled in the form of one share of PG&E Corporation common stock, cash equal to the value of such shares, or a combination of both. The actual number of stock units eligible for settlement may be larger or smaller than the number included in the original award, based on predetermined performance factors. The distribution may occur or commence when all vesting conditions applicable to the RSUs have been satisfied, or it may be deferred to a later date, if permitted by the Committee or set forth in the applicable award agreement.
The holders of RSUs will have no voting rights unless and until the RSUs are settled in shares of PG&E Corporation common stock.
Termination of Employment or Other Relationship with PG&E Corporation. Unless otherwise provided by the Committee specified in the applicable restricted stock agreement or RSU agreement, upon a participant’s termination of employment or other relationship with PG&E Corporation, all unvested restricted stock and RSUs are forfeited.
Performance Awards
The Committee may grant performance awards in the form of performance shares or performance units. Specific terms of performance awards (including the number of shares or units awarded, dividend equivalents (if any), and the performance award formula, goal, and period) will be set by the Committee consistent with the 2021 LTIP.
Performance Goals. The final value of a performance will be based on the extent to which the established performance goals are achieved within the corresponding performance period. Performance goals are targets relating to one or more measures of business, or financial performance. Performance measures are calculated with respect to PG&E Corporation, its subsidiaries, divisions, and/or business units, or may be based on performance relative to performance of other companies or upon comparison of any of the indicators of performance relative to performance of other companies.
These measures may be based on one or more of the following: (1) sales revenue, (2) gross margin, (3) operating margin, (4) operating income, (5) pretax profit, (6) earnings before interest, taxes, and depreciation and amortization (EBITDA)/ adjusted EBITDA, (7) net income, (8) expenses, (9) the market price of the stock, (10) earnings per share, (11) return on shareholder equity or assets, (12) return on capital, (13) return on net assets, (14) economic profit or economic value added (EVA), (15) market share, (16) customer satisfaction, (17) safety, (18) total shareholder return, (19) earnings, (20) cash flow, (21) revenue, (22) profits before interest and taxes, (23) profit/loss, (24) profit margin, (25) working capital, (26) price/earnings ratio, (27) debt or debttoequity, (28) accounts receivable, (29) writeoffs, (30) cash, (31) assets, (32) liquidity, (33) core earnings, (34) operational reliability, (35) environmental performance, (36) funds from operations, (37) adjusted revenues, (38) free cash flow, or (39) operational performance. The Committee shall determine the extent to which applicable performance goals have been attained and, if applicable, the resulting final value of the award.
Performance Shares. Unless otherwise provided by the Committee, the initial value of a performance share is the fair market value of one share of PG&E Corporation common stock on the grant date. The Committee will also specify the form of payment for the settlement of performance shares: cash, stock, or a combination of both.
Performance Units. Each performance unit will have an initial value determined by the Committee.
Voting Rights. The holders of performance share awards will have voting rights only as to those awards that settle in stock and only after the underlying shares have been issued by PG&E Corporation.
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Termination of Employment or Other Relationship with PG&E Corporation. Unless otherwise provided by the Committee or set forth in the performance share or performance unit agreement, the 2021 LTIP describes how a participant’s termination of employment or other relationship with PG&E Corporation affects that individual’s performance shares or performance units.
Stock Options
The Committee may grant ISOs, NQSOs, and related tandem SARs.
Stock Options. Stock options allow the participant to buy a certain number of shares of PG&E Corporation common stock at an exercise price equal to at least the fair market value on the date the option is granted (subject to certain limitations set forth in the 2021 LTIP). The participant may exercise an option only during specified time periods. Specific terms of the option will be set by the Committee.
Payment for Shares Upon Exercise of Stock Options. At the time a stock option is exercised, shares of PG&E Corporation common stock may be purchased using the following, to the extent provided in the option agreement and permitted by law:
• | Cash or certain cash equivalents, | • | Shares of PG&E Corporation common stock owned by the participant, with a fair market value equal to or greater than the option exercise price, | • | A “cashless exercise” procedure (whereby a broker sells the shares or holds them as collateral for a margin loan, and delivers the net stock option sale or loan proceeds to the participant), subject to limitations set forth by the Committee and PG&E Corporation, | • | A “net exercise” procedure (whereby the participant receives the number of shares with a value equivalent to the net proceeds from the participant’s exercised options), or | • | Any combination of the foregoing or any other method of payment that the Committee may allow. |
An award agreement may provide that a stock option may be considered exercised, to the extent then vested, if, on the last day of the term of an option, the fair market value of one share of PG&E Corporation common stock exceeds the option price per share, with payment made by withholding shares otherwise issuable in connection with the exercise of the stock option. If a stock option is automatically exercised in this manner, PG&E Corporation will give the participant the number of shares for which the stock option was deemed exercised, less the number of shares required to be withheld for the payment of the total purchase price and required withholding taxes. Any fractional share shall be settled in cash.
Term of Stock Options and Tandem SARs. The maximum term of stock options and any related tandem SARs is 10 years (subject to certain limited extensions if, on the last day of the term, exercise is prohibited by law). Stock options are subject to earlier termination, as described below.
Termination of Employment or Other Relationship with PG&E Corporation. Unless otherwise provided by the Committee, each stock option agreement will describe how a participant’s termination of employment or other relationship with PG&E Corporation affects the exercise of that individual’s stock options.
Stock Appreciation Rights (SARs)
The Committee may grant awards in the form of freestanding or related tandem SARs. SARs are a bookkeeping entry representing, for each share of PG&E Corporation common stock subject to the SAR or related stock option, the right to receive payment in combination of shares and cash equal to the amount by which the fair market value (on the date of surrender) of the shares subject to the SAR or the related stock option exceeds the exercise price.
Exercisability and Term. Specific terms of an SAR award (including the number awarded, exercise price, the date when all or any part of the SAR can be exercised, and the term) will be set by the Committee. A tandem SAR is subject to the same terms and conditions as the related stock option. A tandem SAR can be exercised only if the related option is surrendered, subject to limitations established by the Committee. No SAR will be exercisable more than 10 years after the date it was granted (subject to certain limited extensions if, on the last day of the term, exercise is prohibited by law).
Exercise of SARs. Upon exercise of an SAR, the participant will receive shares, cash, or a combination of shares and cash, as determined by the Committee. The total amount of cash and/or the fair market value of PG&E Corporation common stock received upon exercise of an SAR will be equal to the amount by which the fair market value (on the date of surrender) of the shares subject to the SAR or related option exceeds the exercise price.
An award agreement may provide that if, on the date that an SAR expires, the exercise price of the SAR is less than the fair market value of the shares underlying the SAR, but any portion of the SAR has not been exercised, then the unexercised portion of the SAR, to the extent then vested, will automatically be deemed to be exercised as of that date.
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Termination of Employment or Other Relationship with PG&E Corporation. Unless otherwise provided by the Committee, each SAR agreement will describe how a participant’s termination of employment or other relationship with PG&E Corporation affects that individual’s SARs.
Automatic Awards for Non-Employee Directors
Under the 2021 LTIP, upon election to the Board at each year’s annual meeting of shareholders, each director of PG&E Corporation who is not an employee of PG&E Corporation or a subsidiary will automatically receive an annual incentive award. The annual award will be granted on the later of (1) the date on which the annual director election results are certified or (2) the date the 2021 LTIP becomes effective and grants can be made consistent with legal requirements. Such awards may be delayed until the first business day of the next open trading window period for the common stock of PG&E Corporation following certification of director election results.
Currently, non-employee directors are awarded annual RSUs with a grant date value of $140,000, with an additional $80,000 in value provided to the Chair of the PG&E Corporation Board. The maximum aggregate value of equity and cash-based awards granted to any non-employee director of PG&E Corporation during any calendar year shall not exceed $750,000, except that, in the case of a non-employee director who is serving as Chairman of the Board the annual limit shall be increased by 200 percent.
These RSUs generally vest after one year, at the earlier of the grant date anniversary or the end of the director’s elected term and may vest earlier upon the occurrence of certain events provided for in the 2021 LTIP. Directors may elect to defer receipt of such awards in accordance with the rules set forth in the 2021 LTIP.
Notwithstanding the above, the Board retains discretion to establish different terms and conditions pertaining to automatic non-employee director awards, or to amend the program, provided that the $750,000 limit described above may only be amended with shareholder approval.
Deferred Compensation Programs
The Committee may establish one or more deferred compensation programs under the 2021 LTIP to permit certain participants to irrevocably elect prior to a date specified by the Committee (i) to reduce cash compensation and to be automatically granted stock units subject to the terms of a deferred compensation award or (ii) to be automatically granted stock units subject to the terms of a deferred compensation award in lieu of cash or shares of PG&E Corporation common stock otherwise issuable to the participant upon the settlement of an award.
Specific terms of any stock units will be set by the Committee, consistent with terms of the 2021 LTIP.
Voting Rights. Participants will have no voting rights with respect to shares of PG&E Corporation common stock represented by stock units until the underlying shares are issued.
Settlement of Awards. A participant who elects to receive stock units must specify a settlement date for those units at the time of such election. Except as otherwise set forth in the award agreement, on the earlier of the settlement date or separation from service, the participant will receive a number of whole shares of PG&E Corporation common stock equal to the number of whole stock units subject to the deferred compensation awards. The participant will not be required to pay any additional amounts (other than applicable tax withholding) to acquire those shares. Any fractional stock units will be paid in cash.
Other Stock-Based Awards
The Committee also may grant other stockbased awards that are valued based on PG&E Corporation stock or dividends on that stock.
Dividend Equivalent Rights and Distributions
Dividends and dividend equivalents may be issued in connection with awards, the specific terms of which will be determined by the Committee, consistent with the terms of the 2021 LTIP. Dividend equivalents entitle the holder to be credited with an amount equal to all cash dividends paid on the shares underlying awards while the awards are outstanding. However, cash dividends, stock and any other property (other than cash) distributed as a dividend, a dividend equivalent or otherwise with respect to any award shall either not be payable or credited or be accumulated, subject, in either case, to restrictions and risk of forfeiture to the same extent as the underlying award with respect to which such cash, stock or other property has been distributed and paid after such restrictions and risk of forfeiture lapse in accordance with the terms of the applicable award agreement.
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Adjustments
The number of shares subject to any award, and the award limits set forth in the 2021 LTIP, generally are subject to adjustment for certain events affecting the stock of PG&E Corporation (such as stock splits, stock dividends, or similar events) and the adjusted awards generally will continue to be subject to the same terms and conditions.
No Repricing or Buyouts
The 2021 LTIP does not allow outstanding stock options or SARs to be repriced or to be bought by PG&E Corporation for cash or otherwise, unless the shareholders approve the repricing or buyout. Subject to certain exceptions, shareholder approval generally would be required for any of the following: (a) the cancellation of outstanding stock options or SARs and the grant in substitution therefore of new stock options or SARs having a lower exercise price, another award, cash or a combination thereof (other than in connection with a change in control), (b) the amendment of outstanding stock options or SARs to reduce the exercise price thereof, (c) the purchase of outstanding unexercised stock options or SARs by PG&E Corporation whether by cash payment or otherwise if the exercise price of such Option or SAR is higher than the fair market value of an underlying shares of PG&E Corporation common stock as of the date of purchase, or (d) any other action with respect to a stock option or SAR that would be treated as a repricing under the rules and regulations of the principal U.S. national securities exchanges on which PG&E Corporation common stock is listed.
Other Terms of Awards
Transferability of Incentive Awards. Awards and shares of PG&E Corporation common stock that have not been issued or as to which any applicable restriction, performance or deferral period has not lapsed, may not be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent and distribution. Such awards may be exercised during the life of the participant only by the participant or the participant’s guardian or legal representative. Notwithstanding the foregoing, the Committee may permit an award to be assigned or transferred to a family member or other permitted transferee to the extent covered under a Form S-8 Registration Statement under the Securities Act.
Deferral of Payments. The Committee may allow the deferral of any cash payments that may become due under the 2021 LTIP.
Effect of Change in Control. In the event of a change in control, the acquiror may elect to assume, continue, or substitute awards under the 2021 LTIP with awards based on stock of the acquiror. If the successor corporation does assume or continue any outstanding 2021 LTIP awards, they may be subject to accelerated vesting, exercisability, or lapse of restrictions, as the Committee or Board may determine, if the participant is terminated in connection with the change in control. In the event of a Change in Control in which Awards are not assumed or continued, a participant’s then-outstanding Awards that are not vested shall immediately vest, and all performance conditions associated with Performance Awards shall be deemed satisfied as if target performance was achieved, except as set forth in an applicable award agreement.
Tax-Related Issues
Tax Withholding. To the extent a participant incurs any tax liability in connection with the exercise, vesting, or receipt of an incentive award, the participant’s withholding obligation may be satisfied through payroll deductions or a direct cash payment to PG&E Corporation. In addition, the Committee may allow the participant to satisfy the withholding obligation by allowing PG&E Corporation to withhold a portion of the shares to be issued to the participant, up to the minimum statutory withholding rates.
Federal Income Tax Consequences. The following is a brief description of the federal income tax consequences under current tax laws of restricted stock, RSUs, performance awards, stock options, and tandem SARs granted under the 2021 LTIP. The summary expressly does not discuss the income tax laws of any state, municipality, or non-U.S. taxing jurisdiction, or the gift, estate, excise, or other tax laws other than federal income tax law. In addition, this summary does not discuss the rules applicable to deferred compensation under Section 409A of the Code.
Restricted Stock. Upon the grant of restricted stock subject to a vesting schedule, the participant will be deemed to receive taxable ordinary income equal to the fair market value of the shares at the time they vest. Upon the sale or disposition of the shares, the participant will realize capital gain or loss in an amount equal to the difference between the fair market value of the shares on the applicable vesting date and the sale or disposition price.
Section 83(b) of the Code permits a participant to elect, within 30 days after the grant of any shares of restricted stock subject to a vesting schedule, to be taxed at ordinary income rates on the fair market value of all the unvested shares received, based on the fair market value of the shares on the date of grant. If the participant makes a Section 83(b) election, any later appreciation in the value of the shares will be taxable as capital gain instead of ordinary income when they are sold or transferred.
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At the time the participant recognizes ordinary income with respect to a grant of restricted stock, PG&E Corporation will be entitled to a federal income tax deduction in an amount equal to the ordinary income recognized by the participant.
Restricted Stock Units. There will be no federal income tax consequences to either the participant or PG&E Corporation upon the grant of RSUs. Upon the payment of RSUs, the amount received will be taxable to the participant as ordinary income, and PG&E Corporation will be entitled to a corresponding federal income tax deduction.
Performance Awards. Performance awards are generally subject to federal income tax at the time they are settled. PG&E Corporation is generally entitled to a corresponding federal income tax deduction at that time.
Non-Qualified Stock Options. There will be no federal income tax consequences to either the participant or PG&E Corporation upon the grant of an NQSO. Upon the exercise of an NQSO, the participant generally will have taxable ordinary income equal to the difference between the current market value of the shares and the option exercise price, and PG&E Corporation will be entitled to a federal income tax deduction in that amount.
Incentive Stock Options. There will be no federal income tax consequences to either the participant or PG&E Corporation upon the grant or exercise of an ISO. However, unless the holding period requirements discussed below are violated, upon exercise of an ISO, a participant will be deemed to have a tax preference item (equal to the difference between the current market value of the shares on the date of exercise and the option exercise price) that may result in alternative minimum tax liability.
If a participant exercises an ISO and does not dispose of the shares within two years from the date of grant or within one year from the date the shares are transferred to the participant, any gain realized upon disposition will be taxable to the employee as a long-term capital gain, and PG&E Corporation will not be entitled to any deduction.
If a participant violates the holding period requirements, the participant will realize ordinary income in the year of disposition, and PG&E Corporation will be entitled to a corresponding deduction, in an amount equal to the excess of (1) the lesser of (a) the amount realized on the sale or exchange or (b) the fair market value of the shares on the date of exercise, over (2) the option exercise price.
An ISO that is exercised more than three months after the participant terminates employment with PG&E Corporation generally will be treated as an NQSO for federal income tax purposes, unless the termination occurred due to death or disability.
Tandem Stock Appreciation Rights. There will be no federal income tax consequences to either the participant or PG&E Corporation upon the grant of a tandem SAR or during the period that the unexercised right remains outstanding. Upon the exercise of a tandem SAR, the amount received will be taxable to the participant as ordinary income, and PG&E Corporation will be entitled to a corresponding federal income tax deduction.
Deferred Compensation Awards. Deferred compensation awards are generally not subject to income tax until they are payable to the participant. However, deferred compensation awards are subject to employment tax at the time of vesting. PG&E Corporation is generally entitled to a corresponding federal income tax deduction at the time that the participant is subject to income tax.
Amendment and Termination of the 2021 LTIP
The PG&E Corporation Board of Directors or the Committee may at any time suspend, terminate, modify, or amend the 2014 LTIP in any respect, subject to shareholder approval as set forth in the 2021 LTIP or as required by applicable laws or regulations.
The Committee also may amend or modify the terms and conditions of any incentive award, or may cancel an award.
No suspension, termination, modification, or amendment of the 2021 LTIP, and no amendment, modification, or cancellation of any award, may adversely affect a participant’s rights under the 2021 LTIP or such award without the participant’s consent, unless necessary to comply with applicable law.
Funding
The costs of the 2021 LTIP will be borne by PG&E Corporation.
Benefits Under the 2021 LTIP
All awards to our executive officers, employees, or consultants are made at the companies’ discretion, and the benefits and amounts that will be received or allocated under the PG&E Corporation 2021 LTIP are not determinable at this time. If the PG&E Corporation 2021 LTIP had been in effect in 2020, then the following amounts would have been allocated to non-employee directors:
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Plan Benefits
Person or Group of Persons | | Number of
Units/Shares | | All directors who are not executive officers as a group | | | 202,659 | |
Equity Compensation Plan Information(1)
The following table provides information as of December 31, 2020, concerning shares of PG&E Corporation common stock authorized for issuance under PG&E Corporation’s existing equity compensation plans.
| | | (a) | | | (b) | | | (c) | | | Plan Category | | Number of Securities
to be Issued Upon
Exercise of Outstanding
Options, Warrants and
Rights | | | Weighted Average
Exercise Price
of Outstanding
Options, Warrants
and Rights | | | Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a)) | | | Equity compensation plans approved by shareholders | | | 20,902,525 | (2) | | $ | 40.07 | (3) | | | 29,174,205 | (4) | | Equity compensation plans not approved by shareholders | | | – | | | | – | | | | – | | | Total equity compensation plans | | | 20,902,525 | (2) | | $ | 40.07 | (3) | | | 29,174,205 | (4) |
(1) | Subject to Compensation Committee certification | (2) | Includes 160 phantom stock units, 904,067 restricted stock units and 17,724,603 performance shares. The weighted average exercise price reported in column (b) does not take these awards into account. For performance shares, amounts reflected in this table assume payout in shares at 200 percent of target or, for performance shares granted in 2018, reflects the estimated payout percentage of zero percent for performance shares using a total shareholder return metric, 200 percent for performance shares using a safety metric, and zero percent for performance shares using a financial metric. The actual number of shares issued can range from zero percent to 200 percent of target depending on achievement of performance objectives. For performance-based stock options, amounts reflected in this table reflect an actual payout of 102 percent. Restricted stock units and performance shares are generally settled in net shares. Upon vesting, shares with a value equal to required tax withholding will be withheld and, in lieu of issuing the shares, taxes will be paid on behalf of employees. Shares not issued due to share withholding or performance achievement below maximum will be available again for issuance. | (3) | This is the weighted average exercise price for the 2,273,695 options outstanding as of December 31, 2020. | (4) | Represents the total number of shares available for issuance under all PG&E Corporation equity compensation plans as of December 31, 2020. Stock-based awards granted under these plans include restricted stock units, performance shares, stock options, and phantom stock units. The 2014 Long Term Incentive Plan (2014 LTIP), which became effective on May 12, 2014, authorizes up to 17 million shares to be issued pursuant to awards granted under the 2014 LTIP. In addition, 5.5 million shares related to awards outstanding under the 2006 Long Term Incentive Plan at December 31, 2013, or awards granted under the 2006 Long Term Incentive Plan from January 1, 2014, through May 11, 2014, were cancelled, forfeited or expired and became available for issuance under the 2014 LTIP. A further 30 million shares were authorized for issuance under the 2014 LTIP on July 1, 2020, as part of PG&E Corporation’s Chapter 11 Plan of Reorganization. |
The Board of Directors of PG&E Corporation Unanimously Recommends a Vote FOR this Proposal.
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Our Shareholders
SHARE OWNERSHIP INFORMATION
Principal Shareholders
The following table presents certain information regarding shareholders that PG&E Corporation and the Utility know are beneficial ownersrequired to provide shareholders at least once every six calendar years the opportunity to cast a non-binding advisory vote on whether a non-binding advisory vote to approve executive compensation (“say-on-pay vote”), such as the one included in Proposal 2 of more than 5 percent of any class of voting securities of the Corporationthis Proxy Statement, shall occur every one, two, or the Utility as of March 8, 2021 (except as noted below).
| Class of Stock | | Name and Address of
Beneficial Owner | | Amount and Nature of
Beneficial Ownership | | Percent
of Class | | Pacific Gas and Electric Company stock(1) | | PG&E Corporation(2)
77 Beale Street
P.O. Box 770000
San Francisco, CA 94177 | | 264,374,809 | | 96.24% | | PG&E Corporation common stock | | PG&E Fire Victim Trust(3)
Two Embarcadero Center,
Suite 1500
San Francisco CA, 94111 | | 477,743,590 | | 24% | | PG&E Corporation common stock | | FMR LLC
245 Summer Street,
Boston, MA 02210 | | 151,746,986 | (4) | 7.6% | | PG&E Corporation common stock | | The Vanguard Group Inc.
100 Vanguard Blvd.
Malvern, PA 19355 | | 134,894,201 | (5) | 6.8% | | Pacific Gas and Electric Company first preferred stock | | Stonehill Capital
Management LLC, et al.
885 Third Avenue, 30th Fl
New York, NY, 10022 | | 998,472 | (6) | 9.7% |
(1) | The Utility’s common stock and preferred stock vote together as a single class. Each share is entitled to one vote. | (2) | As of March 8, 2019, the Corporation held 100 percent of the issued and outstanding shares of Utility common stock, and no Utility preferred shares. | (3) | In connection with the Plan of Reorganization, in July and August 2020, the Utility distributed 477,743,590 shares of PG&E Corporation common stock to the PG&E Fire Victim Trust (the “Trust”). As of March 31, 2021, The Trust has advised PG&E Corporation that it continued to hold beneficial ownership of 477,743,590 shares of PG&E Corporation common stock. In a Schedule 13D filed with the SEC on July 10, 2020 by the Trust and the honorable John K. Trotter (ret) as Trustee for the Trust, the Trust and Trustee disclosed that the Trustee may be deemed to have shared dispositive power or shared voting power over shares held by the Trust. Subject to limited exceptions, the Trust has entered into an agreement with PG&E Corporation pursuant to which all shares of PG&E Corporation common stock held by the Trust in excess of 9.9% of the outstanding shares of PG&E Corporation common stock are subject to “mirror voting”, whereby such shares of common stock must be voted in the same proportion as the votes of all other shareholders of PG&E Corporation on all matters except for those directly related to the natural environment or safety. See “Related Party Transactions” below for further information about certain agreements between PG&E Corporation, the Utility, and the Trust. | (4) | The information relates to beneficial ownership as of December 31, 2020, as reported in an amended Schedule 13G/A filed with SEC on February 8, 2021, by FMR LLC and Abigail P. Johnson (FMR LLC’s Director, Chairman, and Chief Executive Officer). For these purposes, FMR LLC and Ms. Johnson report sole voting power with respect to 19,813,452 shares, and sole dispositive power with respect to 151,746,986 shares of PG&E Corporation common stock. | (5) | The information relates to beneficial ownership as of December 31, 2021, as reported in an amended Schedule 13G/A filed with the SEC on February 10, 2021, by The Vanguard Group, Inc. (“Vanguard”). For these purposes, Vanguard has shared voting power with respect to 2,035,490 shares, sole dispositive power with respect to 131,856,001 shares, and shared dispositive power with respect to 3,038,200 shares of PG&E Corporation common stock. | (6) | The information relates to beneficial ownership as of December 31, 2020, as reported in an amended Schedule 13G/A filed with the SEC on February 12, 2021 by Stonehill Capital Management LLC (“Stonehill”) and the following entities and individuals, all of whom share voting and dispositive power with respect to the shares: Stonehill Institutional Partners, L.P., John Motulsky, Christopher Wilson, Jonathan Sacks, Peter Sisitsky, Michael Thoyer, Michael Stern, and Samir Arora. Stonehill Institutional Partners, L.P. on its own has shared voting and dispositive power with respect to 546,223 shares of Utility preferred shares (5.3 percent) only. |
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Security Ownership of Management
The following table sets forth the number of shares of PG&E Corporation common stock beneficially owned (as defined in the rules of the SEC) as of March 8, 2021, by the directors, the nominees for director, the NEOs, and all directors and executive officers ofSince 2010, PG&E Corporation and the Utility as a group. As of March 8, 2021, no listed individual owned shares of any class of Utility securities. The table also sets forth common stock equivalents creditedeach has provided shareholders with an annual advisory vote to approve the accounts of directorscompanies’ executive compensation policies.
Consistent with the companies’ existing policy and practice, the Boards recommend that the companies continue to provide shareholders with an annual opportunity to provide an advisory vote to approve executive officers undercompensation matters and, therefore, recommend that the Corporation’s deferred compensation and equity plans. Directors and Section 16 Officersfrequency of the Corporationsay-on-pay vote be one year. This vote is non-binding and the Utility may not engage in any hedging or monetization transactions that limit or eliminate the officer’s ability to profit from an increase in the value of company stock, and generally are prohibited from pledging company stock as collateral for a loan.| Name | | Beneficial
Stock
Ownership(1)(2) | | Percent of
Class(3) | | Common
Stock
Equivalents(4) | | Total | | Rajat Bahri(5) | | 0 | | * | | 0 | | 0 | | Cheryl F. Campbell(5) | | 15,504 | | * | | 0 | | 15,504 | | Kerry Cooper(5) | | 0 | | * | | 0 | | 0 | | Jessica Denecour(5) | | 0 | | * | | 0 | | 0 | | Admiral Mark Ferguson III(5) | | 0 | | * | | 0 | | 0 | | Robert Flexon(5) | | 0 | | * | | 0 | | 0 | | W. Craig Fugate(5) | | 0 | | * | | 0 | | 0 | | Arno Harris(5) | | 0 | | * | | 0 | | 0 | | Michael Niggli(5)(11) | | 500 | | * | | 0 | | 500 | | Patricia K. Poppe(5)(6) | | 609 | | * | | 0 | | 609 | | Dean Seavers(5) | | 0 | | * | | 0 | | 0 | | William L. Smith(5)(7) | | 186,231 | | * | | 0 | | 186,231 | | Oluwadara Treseder(5) | | 0 | | * | | 0 | | 0 | | Benjamin Wilson(5) | | 0 | | * | | 0 | | 0 | | John M. Woolard(5) | | 11,628 | | * | | 0 | | 11,628 | | Adam L. Wright(5)(8) | | 0 | | * | | 0 | | 0 | | Michael A. Lewis(9) | | 4,209 | | * | | 9 | | 4,209 | | Christopher A. Foster(9) | | 14,611 | | * | | 0 | | 14,611 | | David S. Thomason(9) | | 15,306 | | * | | 0 | | 15,306 | | John R. Simon(9) | | 104,747 | | * | | 160 | | 104,907 | | James M. Welsch(9) | | 21,254 | | * | | 0 | | 21,254 | | William D. Johnson(9)(10) | | 1,033,556 | | * | | 0 1,033,556 | | | | Andrew M. Vesey(9)(10) | | 27,313 | | * | | 0 | | 27,313 | | Jason P. Wells(9)(10) | | 39,859 | | * | | 0 | | 39,859 | | Janet C. Loduca(9)(10) | | 18,901 | | * | | 0 | | 18,901 | | All PG&E Corporation directors and executive officers as a group | | | | | | | | | | (18 persons) | | 1,457,668 | | * | | 160 | | 1,457,828 | | All Utility directors and executive officers as a group (19 persons) | | 289,827 | | * | | 0 | | 289,827 |
* | Less than 1 percent | (1) | This column includes any shares held in the name of the spouse, minor children, or other relatives sharing the home of the listed individuals and, in the case of current and former executive officers, includes shares of PG&E Corporation common stock held in the defined contribution retirement plan maintainedis required by PG&E Corporation. The listed individuals have sole voting and investment power over the shares shown in this column. Voting power includes the power to direct the voting of the shares held, and investment power includes the power to direct the disposition of the shares held. | | This column also includes the following shares of PG&E Corporation common stock in which the listed individuals share voting and investment power: Mr. Wells 39,759 shares and Mr. Simon 55,106 shares, all PG&E Corporation directors and executive officers as a group 94,865 shares. No reported shares are pledged. | (2) | This column includes the following shares of PG&E Corporation common stock that the individuals have the right to acquire within 60 days of March 8, 2021, through the exercise of vested stock options or the settlement of vested phantom stock awards: Mr. Lewis 2,696 shares, Mr. Foster 3,911 shares, Mr. Thomason 6,354 shares, Mr. Simon 43,989 shares, Mr. Welsch 9,776 shares, Mr. Johnson 975,621 shares, Ms. Loduca 7,332 shares, all PG&E Corporation directors and executive officers as a group 1,033,549 shares, and all Utility directors and executive officers as a group 26,158 shares. These individuals have neither voting power nor investment power with respect to these shares unless and until they are purchased through the exercise of the options or, with respect to the phantom stock awards, settled in shares of PG&E Corporation common stock, under the terms of the 2006 LTIP and the 2014 LTIP. | (3) | The percent of class calculation is based on the number of shares of PG&E Corporation common stock outstanding as of March 8, 2021, which was 1,985,105,703. |
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(4) | This column reflects the number of stock units that were purchased by listed individuals through salary and other compensation deferrals or that were awarded under equity compensation plans. The value of each stock unit is equal to the value of a share of PG&E Corporation common stock and fluctuates daily based on the market price of PG&E Corporation common stock. The listed individuals who own these stock units share the same market risk as PG&E Corporation shareholders, although they do not have voting rights with respect to these stock units. | (5) | Messrs. Bahri, Ferguson, Flexon, Fugate, Harris, Niggli, Seavers, Smith, Wilson and Woolard, and Mses. Campbell, Cooper, Denecour, Poppe, and Treseder, are directors of both PG&E Corporation and the Utility. Mr. Wright is a director of the Utility. | (6) | Ms. Poppe currently serves as CEO of PG&E Corporation, effective January 4, 2021. | (7) | Mr. Smith was Interim CEO and President of PG&E Corporation from June 30, 2020, through January 3, 2021. He is included in the Summary Compensation Table as an NEO of PG&E Corporation. | (8) | Mr. Wright currently serves as Executive Vice President, Operations and Chief Operations Officer of Pacific Gas and Electric Company, effective February 1, 2021. | (9) | Messrs. Smith, Foster, Simon, Johnson, and Wells are included in the Summary Compensation Table as NEOs of PG&E Corporation. Messrs. Lewis and Vesey and Ms. Loduca are included in the Summary Compensation Table as NEOs of both PG&E Corporation and the Utility. Messrs. Thomason and Welsch are included in the Summary Compensation Table as NEOs of the Utility only. | (10) | Messrs. Johnson, Vesey, and Wells and Ms. Loduca were NEOs during 2020 but are no longer employed with PG&E Corporation or the Utility. | (11) | Mr. Niggli beneficially owns 500 shares of PG&E Corporation common stock directly in his name or in his self-directed individual account. |
Section 16(a) Beneficial Ownership Reporting Compliance In accordance with Section 16(a)14A of the Securities Exchange Act of 1934 and SEC regulations,1934. Shareholders are not voting to approve the Boards’ recommendation. Shareholders will be given choices of one, two, or three years (or abstain). Shareholders’ non-binding approval of a one-, two-, or three-year frequency will not require either company to adopt that frequency. However, if the shareholders of either PG&E Corporation’s and the Utility’s directors and certain officers, as well as persons who own greater than 10 percent of the Corporation’s or the Utility’s equity securities, must file reports of ownership and changes in ownership of such equity securities with the SEC and the principal national securities exchange on which those securities are registered, and must furnish the Corporation or the Utility with copiesdo not approve an annual say-on-pay vote, the Board of all such reports that they file.
Based solely on reviewthe applicable company will examine the voting results and consider whether, among other things, the company should change the frequency of copiesits say-on-pay vote.
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Proposal 4: Ratification of such reports received or written representations from certain reporting persons,the Appointment of the Independent Registered Public Accounting Firm for PG&E Corporation and the Utility believe that during 2020, all filing requirements applicable to their respective directors, officers,Pacific Gas and 10 percent shareholders were satisfied. No information is reported for individuals during periods in which they were not directors, officers, or 10 percent shareholders of the applicable company.2021 Joint Proxy Statement | 99 |
Electric Company | | | | | | | | | | | | | Board Recommendation | | What are you voting on? PG&E Corporation and the Utility each asks its respective shareholders to ratify the appointment of Deloitte & Touche LLP as that company’s independent auditor for the year ending December 31, 2023. | | Vote "FOR" | | | | | |
RELATED PARTY TRANSACTIONS
Approval Policy
The BoardsAudit Committees of PG&E Corporation and the Utility each adopted a written policy (the companies’ Related Party Transaction Policy (“Policy”)) which generally requires Audit Committee approval or ratification of transactionshas selected and appointed Deloitte & Touche LLP (Deloitte & Touche) as the independent auditor for that would require disclosure under Item 404(a) of Regulation S-K undercompany to audit the Securities Exchange Act of 1934 (“Item 404(a)”), except that the Policy has a lower dollar threshold than Item 404(a). Under the Policy, at the first meeting of each year, each company’s Audit Committee reviews, approves, and/or ratifies related party transactions (other than the types of transactions that are excluded from disclosure under Item 404(a), as described below) with values exceeding $10,000 in which either company participates and in which any “Related Party” has a material direct or indirect interest. For these purposes, “Related Party” generally includes (1) any director, nominee for director, or executive officer, (2) holders of greater than 5 percent of that company’s voting securities, and (3) those parties’ immediate family members.
After the annual review and approval of related party transactions, if either company wishes to enter into a new related party transaction, then that transaction must be either pre-approved or ratified by the applicable Audit Committee. If a transaction is not ratified in accordance with the Policy, management will make all reasonable efforts to cancel or annul that transaction.
Where it is not practical or desirable to wait until the next Audit Committee meeting to obtain approval or ratification, the Chair of the applicable Audit Committee may elect to approve a particular related party transaction. If the Chair of the applicable Audit Committee has an interest in the proposed related party transaction, then that transaction may be reviewed and approved by another independent and disinterested member of the applicable Audit Committee. In either case, the individual approving the transaction must report such approval to the full Committee at the next regularly scheduled meeting.
When reviewing any related party transaction, the Audit Committees consider whether the transaction is on terms comparable to those that could be obtained in arm’s-length dealings with an unrelated third party. The Policy also requires that each Audit Committee disclose to the respective Board any material related party transactions.
As provided in Item 404(a), the following types of transactions are excluded:
• | Transactions where the rates or charges are determined by competitive bids, | • | Transactions for the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority, | • | Transactions for services as a bank depository of funds, transfer agent, registrar, trustee under a trust indenture, or similar services, | • | Benefits received on a pro rata basis by holders of PG&E Corporation or Utility securities, | • | Transactions where the individual’s interest arises solely (1) from such person’s position as a director of another corporation or organization that is a party to the transaction, (2) from the direct or indirect ownership of such person and a specific group (consisting of directors, nominees for director, and executive officers of the corporation, or any member of their immediate families), in the aggregate, of less than a 10 percent equity interest in another person (other than a partnership) that is a party to the transaction, or (3) from both such position and ownership, | • | Transactions where the individual’s interest arises solely from the holding of an equity interest (including a limited partnership interest, but excluding a general partnership interest) or a creditor interest in another person that is party to the transaction with PG&E Corporation, the Utility, or any of their respective subsidiaries or affiliates, and the transaction is not material to such other person, | • | Transactions where the individual’s interest arises only from such person’s position as a limited partner in a partnership engaged in a transaction with PG&E Corporation or the Utility, in which the individual’s interest (when aggregated with any other Related Parties) is less than 10 percent and the individual does not serve as a general partner of, nor hold another position in, the partnership, | • | An employment relationship or transaction involving an executive officer of the respective company (and any related compensation resulting solely from that relationship or transaction), if the compensation is reported pursuant to Regulation S-K, Item 402, |
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• | An employment relationship or transaction involving an executive officer of the respective company (and any related compensation resulting solely from that relationship or transaction), if the compensation would have been reported pursuant to Regulation S-K, Item 402 as compensation earned for services if that individual were an executive officer named in the Summary Compensation Table, and such compensation had been approved or recommended to the Board by the PG&E Corporation Compensation Committee (and the executive officer is not an immediate family member of another Related Party), or | • | Compensation provided to a director, provided that such compensation is reported pursuant to Regulation S-K, Item 407. |
Since January 1, 2020, all related party transactions have been approved or ratified by the applicable Audit Committee in accordance with this Policy, with the exception of certain agreements entered into with the PG&E Fire Victim Trust, and which were approved by the Bankruptcy Court and the full PG&E Corporation Board in connection with the Companies’ emergence from Chapter 11.
RELATED PERSON TRANSACTIONS
Since January 1, 2020, an affiliate of Fidelity Management and Research Company, LLC (Fidelity) has provided recordkeeper and trustee services for benefit plans sponsored by PG&E Corporation. During 2020, Fidelity became beneficial owner of at least 5 percent of PG&E Corporation common stock. In exchange for these services, Fidelity affiliates earned approximately $1,100,000 in fees during 2020. The services were (1) approved by the PG&E Corporation Audit Committee, and (2) subject to terms comparable to those that could be obtained in arm’s-length dealings with an unrelated third party. Such services were initiated prior to Fidelity becoming a five percent owner of PG&E Corporation common stock, and PG&E Corporation expects that Fidelity affiliates will continue to provide similar services and products in the future, at similar levels, in the normal course of business operations.
Kathy Thomason is employed by the Utility as a Strategic Analyst, Principal, and she is the spouse of David S. Thomason, who is Vice President, Chief Financial Officer, and Controller of the Utility. Since January 1, 2020, Ms. Thomason received compensation and related payments and benefits from the Utility with an annual value of approximately $170,000. Any payments to Ms. Thomason for services rendered during 2021 are expected to be similar in nature and value to payments provided during 2020, consistent with the Utility’s policies and practices that apply to employee compensation generally.
In connection with the Plan of Reorganization, in July and August 2020, the Utility distributed 477,743,590 shares of PG&E Corporation common stock to the Trust and entered into the following agreements with the Trust:
• | Assignment Agreement: On July 1, 2020, the Utility and the Trust entered into an assignment agreement (the “Assignment Agreement”). Pursuant to the Assignment Agreement, the Utility funded the Trust with aggregate consideration consisting of $6.75 billion in cash (including $1.35 billion on a deferred basis in accordance with the Tax Benefits Payment Agreement described below) and 476,995,175 shares of PG&E Corporation common stock (the “Initial Plan Shares”). On August 3, 2020, pursuant to an antidilution provision in the Assignment Agreement, the Utility distributed an additional 748,415 shares of PG&E Corporation common stock to the Trust (together with the Initial Plan Shares, the “Plan Shares”). | • | Registration Rights Agreement: In addition to various obligations relating to registration of PG&E Corporation, the common stock (summarized in PG&E Corporation’s Current Report on Form 8-K filed on June 24, 2020), PG&E Corporation is required to pay the fees and expenses for one counsel for the Trust (subject to a cap of $100,000 for the initial registration and for each assisted underwritten offering) in connection with the initial registration and each assisted underwritten offering, but excluding any underwriting discounts or commissions or fees and expenses of the Trust. | • | Tax Benefits Payment Agreement: The Utility agreed to pay to the Trust in cash an aggregate amount of $1.35 billion, comprising (i) at least $650 million of tax benefits for fiscal year 2020 to be paid on or before January 15, 2021 (the “First Payment Date”), and (ii) of the remainder of the $1.35 billion of tax benefits for fiscal year 2021 to be paid on or before January 15, 2022. |
As previously disclosed, in 2020, prior to the effective date of the Plan of Reorganization, PG&E Corporation entered into certain backstop commitment letters and related arrangements with Knighthead Capital Management LLC and Abrams Capital Management, LP, and the Utility entered into certain backstop commitment letters and related arrangements with Stonehill Capital Partners LLC. See “Note 2 – Bankruptcy Filing – Equity Financing - Equity Backstop Commitments and Forward Stock Purchase Agreements” to PG&E Corporation’s and the Utility’s consolidated financial statements as of and for the year ended December 31, 2020, included in PG&E Corporation’s2023, and to audit the Utility’s 10-K foreffectiveness of internal control over financial reporting as of December 31, 2023. Deloitte & Touche is a description of these arrangements.
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Legal Proceedings
Wildfire-Related Derivative Litigation
Two purported derivative lawsuits alleging claims for breach of fiduciary duties and unjust enrichment were filedmajor national accounting firm with substantial expertise in the San Francisco County Superior Court on November 16, 2017,energy and November 20, 2017, respectively, namingutility businesses. Deloitte & Touche has served as defendants certain current and former members of the Board of Directors and certain current and former officers ofindependent auditors for PG&E Corporation and the Utility. Utility since 1999.
One or more representatives of Deloitte & Touche are expected to be present at the annual meetings. They will have the opportunity to make a statement if they wish and are expected to be available to respond to questions from shareholders. Each company’s Board believes that the appointment of Deloitte & Touche is in the best interests of that company and its shareholders. PG&E Corporation and the Utility are named as nominal defendants. These lawsuits were consolidated bynot required to submit these appointments to a vote of their shareholders. However, each Board believes that requesting shareholder ratification of this selection is a good corporate governance practice. If the court on February 14, 2018, and denominated In Re California North Bay Fire Derivative Litigation (now re-captioned Trotter v. Williams et al.). On April 13, 2018, the plaintiffs filed a consolidated complaint. After the parties reached an agreement regarding a stayshareholders of the derivative proceeding pending resolution of the tort actions described above and any regulatory proceeding relating to the 2017 Northern California wildfires, on April 24, 2018, the court entered a stipulation and order to stay. The stay was subject to certain conditions regarding the plaintiffs’ access to discovery in other actions. On January 28, 2019, the plaintiffs filed a request to lift the stay for the purposes of amending their complaint to add allegations regarding the 2018 Camp fire. Prior to resolution of the plaintiffs’ request to lift the stay, this matter was automatically stayed by PG&E Corporation’s and the Utility’s commencement of the Chapter 11 Cases, as discussed below. On November 12, 2020, the Trustee for the Fire Victim Trust filed a motion to intervene to substitute as the plaintiff in the matter, to which the parties later stipulated. On March 8, 2021, the court granted the parties’ stipulation to substitute the Trustee as the plaintiff. Separately, on February 24, 2021, the Trustee filed an amended complaint in one of the pending state court derivative actions—the Trotter v. Chew action discussed below—asserting two claims for breach of fiduciary duty against certain of PG&E’s directors and officers. Neithereither PG&E Corporation nor the Utility is a party to the action. A case management conference was held on March 18, 2021. A hearing on the defendants’ demurrer and a further case management conference is currently scheduled for July 15, 2021. Trial is currently set for June 27, 2022.On August 3, 2018, a third purported derivative lawsuit, entitled Oklahoma Firefighters Pension and Retirement System v. Chew, et al. (now captioned Trotter v. PG&E Corp., et al.), was filed in the U.S. District Court for the Northern District of California, naming as defendants certain current and former members of the Board of Directors and certain current and former officers of PG&E Corporation and the Utility. PG&E Corporation is named as a nominal defendant. The lawsuit alleges claims for breach of fiduciary duties and unjust enrichment as well as a claim under Section 14(a) of the federal Securities Exchange Act of 1934 alleging that PG&E Corporation’s and the Utility’s 2017 proxy statement contained misrepresentations regarding the companies’ risk management and safety programs. On October 15, 2018, PG&E Corporation filed a motion to stay the litigation. Prior to the scheduled hearing on this motion, this matter was automatically stayed by PG&E Corporation’s and the Utility’s commencement of the Chapter 11 Cases, as discussed below. On December 14, 2020, the court entered a stipulation and order to substitute the Trustee for the Fire Victim Trust as the plaintiff. On March 10, 2021, the court granted the parties’ stipulation to voluntarily dismiss the action without prejudice.
On October 23, 2018, a fourth purported derivative lawsuit, entitled City of Warren Police and Fire Retirement System v. Chew, et al., was filed in San Francisco County Superior Court, alleging claims for breach of fiduciary duty, corporate waste and unjust enrichment. It named as defendants certain current and former members of the Board of Directors and certain current and former officers of PG&E Corporation, and named PG&E Corporation as a nominal defendant. The plaintiff filed a request with the court seeking the voluntary dismissal of this matter without prejudice on January 18, 2019.
On November 21, 2018, a fifth purported derivative lawsuit, entitled Williams v. Earley, Jr., et al. (now captioned Trotter v. Earley, et al.), was filed in federal court in San Francisco, alleging claims identical to those alleged in the Oklahoma Firefighters Pension and Retirement System v. Chew, et al. lawsuit listed above against certain current and former officers and directors, and naming PG&E Corporation and the Utility as nominal defendants. This lawsuit includes allegations related to the 2017 Northern California wildfires and the 2018 Camp fire. This action was stayed by stipulation of the parties and order of the court on December 21, 2018, subject to resolution of the pending securities class action. On January 7, 2021, the court entered a stipulation and order to substitute the Trustee for the Fire Victim Trust as the plaintiff. On March 3, 2021, the court granted the parties’ stipulation to voluntarily dismiss the action without prejudice.
On December 24, 2018, a sixth purported derivative lawsuit, entitled Bowlinger v. Chew, et al. (now captioned Trotter v. Chew, et al.), was filed in San Francisco Superior Court, alleging claims for breach of fiduciary duty, abuse of control, corporate waste, and unjust enrichment in connection with the 2018 Camp fire against certain current and former officers and directors, and naming PG&E Corporation and the Utility as nominal defendants. On February 5, 2019, the plaintiff filed a response to the notice asserting that the automatic stay did not apply to his claims. PG&E Corporation
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and the Utility accordingly filed a Motion to Enforce the Automatic Stay with the Bankruptcy Court as to the Bowlinger action, which was granted. On November 5, 2020, the court entered a stipulation and order to substitute the Fire Victim Trust as the plaintiff. The Trustee for the Fire Victim Trust filed an amended complaint on February 24, 2021, asserting two claims for breach of fiduciary duty against certain of PG&E’s former directors and officers. Neither PG&E Corporation nor the Utility remains a party to the action. A case management conference was held on March 18, 2021. A hearing on the defendants’ demurrer and a further case management conference is currently scheduled for July 15, 2021. Trial is currently set for June 27, 2022.
On January 25, 2019, a seventh purported derivative lawsuit, entitled Hagberg v. Chew, et al., was filed in San Francisco Superior Court, alleging claims for breach of fiduciary duty, abuse of control, corporate waste, and unjust enrichment in connection with the 2018 Camp fire against certain current and former officers and directors, and naming PG&E Corporation and the Utility as nominal defendants. A case management conference is currently set for July 7, 2021.
On January 28, 2019, an eighth purported derivative lawsuit, entitled Blackburn v. Meserve, et al. (now captioned Trotter v. Meserve, et al.), was filed in federal court alleging claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets in connection with the 2017 Northern California wildfires and the 2018 Camp fire against certain current and former officers and directors, and naming PG&E Corporation as a nominal defendant. On January 8, 2021, the court entered a stipulation and order to substitute the Fire Victim Trust as the plaintiff. On March 10, 2021, the court granted the parties’ stipulation to voluntarily dismiss the action without prejudice.
Due to the commencement of the Chapter 11 Cases, PG&E Corporation and the Utility filed notices in each of these proceedings on February 1, 2019, reflecting that the proceedings were automatically stayed through the Effective Date pursuant to section 362(a) of the Bankruptcy Code. PG&E Corporation’s and the Utility’s rights with respect to the derivative claims asserted against former officers and directors of PG&E Corporation and the Utility were assigned to the Fire Victim Trust under the TCC RSA. The assignment became effective as of the Effective Date of the Plan.
The above purported derivative lawsuits were brought against the named defendants on behalf of PG&E Corporation and/or the Utility. As a result of the assignment of these claims to the Fire Victim Trust, any recovery based on these claims would be paid to the Fire Victim Trust. Any such recovery is limited to the extent of any director and officer insurance policy proceeds paid by any insurance carrier to reimburse PG&E Corporation and/or the Utility do not ratify the appointment, the applicable Audit Committee will investigate the reasons for amounts paid pursuant to their indemnification obligationsrejection by the shareholders and will reconsider the appointment. Even if a company’s shareholders ratify the selection, the applicable Audit Committee, in connection withits discretion, may change the appointment at any time during the year if it determines that such causesa change would be in the best interests of action.
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that company and its shareholders. Back | | | | | | | | | | REPORT OF THE AUDIT COMMITTEES The Audit Committees of PG&E Corporation and Pacific Gas and Electric Company are comprised of independent directors and operate under written charters adopted by their respective Boards. The members of the Audit Committees of PG&E Corporation and the Utility are identical. At both PG&E Corporation and the Utility, management is responsible for internal controls and the integrity of the financial reporting process. The Audit Committees reviewed and discussed the audited consolidated financial statements of PG&E Corporation and the Utility with management and the independent auditor. The Audit Committees also discussed with the independent auditor the matters that are required to Contents | |
User Guide
DEFINED TERMS
“2006 LTIP” refersbe discussed by applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC.Deloitte & Touche LLP was the independent auditor for PG&E Corporation and the Utility in 2022. Deloitte & Touche LLP provided to the Committees the written disclosures and letter required by applicable requirements of the PCAOB regarding an independent auditor’s communications with an audit committee concerning independence and non-audit services, and the Audit Committees discussed with Deloitte & Touche LLP that firm’s independence. Based on the Audit Committees’ review and discussions described above, the Audit Committees recommended to the respective Boards and their delegates that the audited consolidated financial statements for PG&E Corporation 2006 Long-Term Incentive Plan. | “2014 LTIP” refers toand the PG&E Corporation 2014 Long-Term Incentive Plan. | “2019 Form 10-K/A” refers to Amendment No. 1 toUtility be included in the PG&E Corporation and Pacific Gas and Electric Company Annual Report on Form 10-K for the year ended December 31, 2019.2022, filed with the SEC.February 15, 2023 Audit Committees of the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company Benjamin F. Wilson (Chair) Rajat Bahri
Robert C. Flexon Arno L. Harris Carlos M. Hernandez | |
| | | | | | | | | | | | | | | 1 “The five names listed above reflect the composition of the Audit Committees as of February 15, 2023, the date of this report of the Audit Committees." |
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INFORMATION REGARDING THE INDEPENDENT AUDITOR FOR PG&E CORPORATION AND PACIFIC GAS AND ELECTRIC COMPANY | | | | Selection and Oversight of the Independent Auditor |
Each Audit Committee is responsible for the appointment, replacement, compensation, and oversight of the work of the independent auditor. The Audit Committees review the scope of the audit, including the terms of the engagement. The independent auditor reports directly to the Audit Committees; at each Audit Committee meeting, the independent auditor meets separately with the Audit Committees, without management present. Annually, each Audit Committee also evaluates the independence, qualifications, and performance of the independent auditor, taking into account the opinions of management and the internal auditors. To ensure continuing independence of the independent auditor, the Audit Committees also consider whether there should be rotation of the independent auditor. In accordance with SEC rules, the lead audit partner may provide a maximum number of five consecutive years of service to the companies. Consistent with that requirement, Deloitte & Touche assigned a new lead auditor to lead the integrated audit of PG&E Corporation’s and the Utility’s financial statements, starting in 2022. The Audit Committees reviewed and evaluated the new lead auditor as part of their annual process for reviewing the independent auditor. For 2023, the Audit Committees selected Deloitte & Touche as the companies’ independent auditor, following consideration of the following factors and criteria: (1) status as a registered public accounting firm and is subject to oversight by the Public Company Accounting Oversight Board; (2) status as a “Big Four” public accounting firm, nationally and internationally recognized as an expert in accounting and auditing; (3) having one of the largest utility practices of the “Big Four” public accounting firms; (4) having made a strong commitment to supporting supplier diversity; (5) having significant experience with the companies; and (6) having an experienced team, including the lead partner, familiar with the industry, assigned to the companies’ engagements. The Audit Committees also considered (1) Deloitte & Touche’s quality control report, (2) Deloitte & Touche’s discussion of its independence, (3) Deloitte & Touche’s performance, and (4) a review of Deloitte & Touche’s proposed audit plan (including draft engagement letter) for 2023. Although Deloitte & Touche has been the companies’ independent auditor since 1999, in 2015 and at the Audit Committees’ direction, the companies solicited bids from accounting firms to conduct the external audits of the companies’ financial statements for the year ending December 31, 2016. The bids were evaluated by the Auditor Selection Committee, which was comprised of members from the companies’ accounting, internal auditing, regulatory, operational, sourcing, and legal functions. The bids were evaluated with respect to four key factors: firm capabilities and background, firm resources and audit plan, supplier diversity plans, and pricing. Upon consideration of the information provided by the Auditor Selection Committee, each Audit Committee appointed Deloitte & Touche as the independent auditor for the year ending December 31, 2016. | | | Fees Paid to the Independent Auditor During 2022 and 2021(2) |
The Audit Committees have reviewed the audit and non-audit fees that PG&E Corporation, the Utility, and their respective controlled subsidiaries have been billed for by the independent auditor (including subsidiaries and affiliates), in order to consider whether the nature and relative value of those fees are compatible with maintaining the firm’s independence. Table 1: Fees Billed to PG&E Corporation (Amounts include Fees Billed to the Utility and its Subsidiaries shown in Table 2 below) | | | | | | | | | | | 2022 | 2021 | | Audit Fees | $7.145 million | $6.250 million | | Audit-Related Fees | $0.365 million | $0.180 million | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 |
Table 2: Fees Billed to the Utility and its Subsidiaries (Amounts are included in Fees Billed to PG&E Corporation shown in Table 1 above) | | | | | | | | | | | 2022 | 2021 | | Audit Fees | $6.160 million | $5.348 million | | Audit-Related Fees | $0.340 million | $0.180 million | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 |
| | | | | | | | | | | | | | | 2 The 2022 fee amounts are not final as of the date of this report due to ongoing audit procedures related to potential sale of a minority interest in Pacific Generation LLC. |
| | | | | | | 2023 Joint Proxy Statement | 87 |
Audit fees billed for 2022 and 2021 relate to services rendered by Deloitte & Touche and its affiliates in connection with reviews of Quarterly Reports on Form 10-Q; certain limited procedures on registration statements; the audits of the annual financial statements of PG&E Corporation and its subsidiaries and the Utility and its subsidiaries; the audits of both PG&E Corporation’s and the Utility’s internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act; support for statutory or regulatory filings or engagements and regulators’ reviews of auditor workpapers; procedures related to California wildfires, tax matters, and transactions including securitization accounting, the sale of transmission tower wireless licenses, and the Oakland lease. The increase in audit fees billed for 2022 as compared to 2021 is primarily due to audit procedures related to the potential sale of a minority interest in Pacific Generation LLC. Audit-related fees billed for 2022 and 2021 relate to services rendered by Deloitte & Touche and its affiliates for nuclear decommissioning trust audits, consultations on financial accounting and reporting standards, required agreed-upon procedure reports related to contractual obligations of the Utility and its subsidiaries, and attest services for securitization entities. The increase in audit-related fees billed in 2022 as compared to 2021 is primarily due to an increase in attest services for securitization entities. | | | | Tax Fees and All Other Fees |
Deloitte & Touche and its affiliates provided no services in these categories during 2022 and 2021. | | | | Obtaining Services from the Independent Auditor |
Annual Review and Pre-Approval of Services For each fiscal year, each Audit Committee approves a list of services that will be obtained during that year by the applicable company and its controlled subsidiaries and affiliates from the independent auditor (including its affiliates). The approved services generally are consistent with the descriptions below: | | | | | | | Category | Description | | Audit services | Audit and review of annual and quarterly financial statements, expressing opinions on the conformity of the audited financial statements with generally accepted accounting principles, auditing management’s assessment of the effectiveness of internal control over financial reporting, and services that only the independent auditor reasonably can provide (e.g., comfort letters, statutory and regulatory audits, attest services, consents, assistance with and review of documents filed with the SEC, and assistance with new accounting standards, laws, and regulations). | | Audit-related services | Assurance and related services that traditionally are performed by the independent auditor (e.g., agreed-upon procedure reports related to contractual obligations and financing activities, nuclear decommissioning trust audits, and attest services). | | Tax services | Advice relating to compliance, tax strategy, tax appeals, and specialized tax issues, all of which also must be permitted under the Sarbanes-Oxley Act. | | Non-audit services | None. |
The Audit Committees also approve maximum fee amounts for each type of approved service. As part of the review process, the Audit Committees assess, among other things, the impact of that service on the independent auditor’s independence. During 2018, management adopted a policy of retaining Deloitte & Touche, Deloitte Consulting, or their subsidiaries or affiliates (together, “Deloitte”) for non-audit services only if the services (1) do not impair Deloitte & Touche’s independence, in fact or appearance, and are permitted by any rules regarding auditor independence, and (2) when aggregated, total amounts paid per year by the companies to Deloitte for “tax service” and “other services” (non-audit services) will be no more than 20 percent of the expected amounts that the companies will pay to Deloitte for “audit services” and “audit-related services.” Mid-Year Monitoring and Approval of Additional Services During the year, management periodically updates each Audit Committee as to the extent to which the approved services have already been provided. The Audit Committees also must approve (1) any proposed new services that were not approved during the annual review and (2) any increase in authorized fee amounts for previously approved services. Delegation of Pre-Approval Authority Each Audit Committee has delegated to its Committee Chair, or to any other independent Committee member if the Chair is not available, the authority to pre-approve services provided by the applicable company’s independent auditor. These pre-approvals must be presented to the full Audit Committee at its next regularly scheduled Committee meeting. Services Provided During 2022 and 2021 During 2022 and 2021, all services provided by Deloitte & Touche to PG&E Corporation, the Utility, and their consolidated affiliates were approved consistent with the applicable pre-approval procedures.
| | | | | | | 2023 Joint Proxy Statement | 88 |
User Guide DEFINED TERMS | | |
| “2014 LTIP” refers to the PG&E Corporation 2014 Long-Term Incentive Plan. | “2021 LTIP”refers to the PG&E Corporation 2021 Long-Term Incentive Plan. | “20202022 Annual Report”refers to the PG&E Corporation and Pacific Gas and Electric Company 20202022 Joint Annual Report to Shareholders. | “20212023 Annual Meetings” refers to the 20212023 annual meetings of shareholders of PG&E Corporation and the Utility, which will be held concurrently on May 20, 2021.18, 2023. | “20212023 Proxy Materials”refers to the Joint Notice,, this Proxy Statement, theJoint Notice, Proxy Card or Voting Instruction Card, and the 20202022 Annual Report. | “401(k) Plan”refers to the PG&E Corporation Retirement Savings Plan or the PG&E Corporation Retirement Savings Plan for Union-Represented Employees. | “AB 1054” refers to California Assembly Bill 1054 relating to California utilities and wildfire protections | “AB 979” refers to Assembly Bill 979 that requires California-based publicly held corporations to diversify their boards of directors | “Bankruptcy Code” refers to the United States Bankruptcy Code. | “Bankruptcy Court” refers to the U.S. Bankruptcy Court for the Northern District of California. | “Board”refers to the Board of Directors of either PG&E Corporation or the Utility, as applicable. | “CD&A”refers to the section of the Proxy Statement entitled “Compensation Discussion and Analysis.” | “CEO”refers to the position of Chief Executive Officer.Officer of PG&E Corporation. | “CFO” refers to the position of Chief Financial Officer of PG&E Corporation or the Utility, as appropriate. | “COO” refers to the position of Chief Operating Officer of the Utility. | “Chapter 11”refers to chapter 11 of title 11 of the U.S. Code. | “Chapter 11 Cases” refers to voluntary petitions for relief under Chapter 11, which were filed by each of PG&E Corporation and the Utility on January 29, 2019, in the Bankruptcy Court. | “Corporation”refers to PG&E Corporation. | “Corporation Board” refers to the Board of Directors of PG&E Corporation. | “CPUC”refers to the California Public Utilities Commission. | “DEI” DEIB”refers to Diversity, Equity, Inclusion, and InclusionBelonging | “ESG”refers to Environmental, Social, and Governance topics covered in this Proxy Statement. | “Federal Monitor” "EVP" refers to the Utility’s monitor appointed by the federal court to oversee compliance with probation terms.position of Executive Vice President of PG&E Corporation. | "GAAP" refers to Generally Accepted Accounting Principals. | “Guidelines” refers to the Corporate Governance Guidelines adopted by the Boards of PG&E Corporation and the Utility. | “Independent Auditor”refers to the independent registered public accounting firm. | “Joint Notice”refers to the Joint Notice of Annual Meetings of Shareholders of PG&E Corporation and Pacific Gas and Electric Company. | “LTIP”refers to the 20062014 Long-Term Incentive Plan and/or the 2021 Long-Term Incentive Plan. | “NEO”or “Named“Named Executive Officer” refers to an officer who is listed in the Summary Compensation Table of this Proxy Statement. | “Notice of Internet Availability”refers to the “Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 20, 2021,18, 2023, and Notice of Annual Meetings of Shareholders” for PG&E Corporation or the Utility, as applicable, which was mailed to certain shareholders starting on or about April 8, 2021.6, 2023. | “NYSE”refers to the New York Stock Exchange. | “NYSE American” refers to the NYSE American stock exchange (formerly known as NYSE MKT, LLC and as the American Stock Exchange). | “PEO”refers to an officer or officers who serve as “principal executive officer” of PG&E Corporation or Pacific Gas and Electric Company, as appropriate. | “PG&E” refers to both PG&E Corporation and its subsidiary, Pacific Gas and Electric Company, or the “Utility.” |
2021 Joint Proxy Statement | 104 |
| “POR OII” refers to the Plan of Reorganization Order Instituting Investigation proceeding initiated by the CPUC on September 26, 2019. | “Proxy”refers to your authorization for another person or persons to vote your shares at the 20212023 Annual Meetings, in the manner indicated on the Proxy. AlsoProxy also may refer to the person or persons so authorized (also called proxy holders). | “Proxy Card”refers to your proxy card, on which you may indicate how you would like the named proxy holders to vote your shares at the 20212023 Annual Meetings. | “Proxy Statement” refers to this 20212023 Joint Proxy Statement for PG&E Corporation and the Utility. | “PSU” refers to a performance share unit (sometimes also called a performance share). |
| | | | | | | 2023 Joint Proxy Statement | 89 |
| | | “Record Date”is March 22, 2021.20, 2023. This is the date set by the Boards to determine which shareholders may vote at and attend the 20212023 Annual Meetings. | “RSU” "RSU"refers to a restricted stock unit. | “SEC”refers to the United States Securities and Exchange Commission. | “Section 16 Officer”refers to any “officer” as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934. | “STIP”refers to the Short-Term Incentive Plan. | “TCC” SVP” refers to the Official Committeeposition of Tort Claimants.Senior Vice President of PG&E Corporation. | “TCC RSA” refers to Restructuring Support Agreement dated December 6, 2019, with TCC and attorneys and other advisors and agents for certain holders of Fire Victim Claims (as defined therein), as amended. | “TSR”refers to total shareholder return, measured by stock price appreciation and dividends paid, relative to companies in the Performance Comparator Group. | “Utility”refers to Pacific Gas and Electric Company, a subsidiary of PG&E Corporation. | “Voting Instruction Card” refers to the form used by beneficial shareholders or participants in a 401(k) Plan to transmit instructions to the nominee or the plan trustee, respectively, on how to vote any shares for which that shareholder or plan participant has voting rights. |
2021 Joint Proxy Statement | 105“VP” refers to the position of Vice President. |
“WMP” refers to PG&E’s Wildfire Mitigation Plan. |
WEBSITE AVAILABILITY OF GOVERNANCE DOCUMENTS Current copies of the following corporate governance documents are available online through the Corporate Governance section of PG&E Corporation’s website (www.pgecorp.com/pgecorp.com/corp/about-us/corporate-governance.page) or the Company Information section of the Utility’s website (www.pge.com/pge.com/en_US/about-pge/company-information/company-information.page), under the “Get more information about our corporate governance practices” link), as appropriate.• | Corporate Governance Guidelines for PG&E Corporation and Pacific Gas and Electric Company (which include definitions of “independence” for directors) (under the “PG&E Corporation Policies and Bylaws” and “Pacific Gas and Electric Company Policies and Bylaws” links) | • | Charters for the standing committees of the PG&E Corporation and Utility Boards of Directors, including the following (under the “PG&E Corporation Board of Directors” and “Pacific Gas and Electric Company Board of Directors” links): |
| • | Audit Committees of PG&E Corporation and the Utility | | • | Compensation Committee of PG&E Corporation | | • | Compliance and Public Policy Committee of PG&E Corporation | | • | Executive Committees of PG&E Corporation and the Utility | | • | Finance Committee of PG&E Corporation | | • | Nominating and Governance Committee of PG&E Corporation | | • | Safety and Nuclear Oversight Committees of PG&E Corporation and the Utility |
link.
• Corporate Governance Guidelines for PG&E Corporation and Pacific Gas and Electric Company (which include definitions of “independence” for directors under the “PG&E Corporation Policies and Bylaws” and “Pacific Gas and Electric Company Policies and Bylaws” links) • Charters for the standing committees of the PG&E Corporation and Utility Boards of Directors, including the following (under the “PG&E Corporation Board of Directors” and “Pacific Gas and Electric Company Board of Directors” links): • Audit Committees of PG&E Corporation and the Utility • Executive Committees of PG&E Corporation and the Utility • Finance and Innovation Committee of PG&E Corporation • People and Compensation Committee of PG&E Corporation • Safety and Nuclear Oversight Committees of PG&E Corporation and the Utility • Sustainability and Governance Committee of PG&E Corporation Current copies of the following codes of conduct, applicable to both companies, are available online through the Compliance and Ethics section of PG&E Corporation’s website (www.pgecorp.com/pgecorp.com/corp/about-us/compliance-ethics/program.page) or the Company Information section of the Utility’s website (www.pge.com/pge.com/en_US/about-pge/company-information/company-information.page), under the “Find out why we emphasize compliance and ethics” link), as appropriate.• | link. • Code of Conduct for Employees (including executive officers) • Code of Conduct for Directors
| | | | | | • | Code of Conduct for Directors |
20212023 Joint Proxy Statement | 106 |
GENERAL INFORMATION ABOUT THE 20212023 ANNUAL MEETINGS AND VOTING How can I participate in the 2021 Annual Meetings?
| | | | How can I participate in the 2023 Annual Meetings? |
The 20212023 Annual Meetings of Shareholders of PG&E Corporation and Pacific Gas and Electric Company will be held on May 20, 2021,18, 2023, at 10 a.m. Pacific time. Due to the COVID-19 pandemic, weWe will only host the 20212023 Annual Meetings by live webcast to protect the health and safety of our shareholders, customers, and employees. Therevideo cast; there will not be a physical in-person meeting. Please be assured that you will be afforded the same rights and opportunities to participate in the virtual meeting as you would at an in-person meeting. To participate in the 20212023 Annual Meetings, follow the instructions on your Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”), Proxy Card (if you received a printed copy of the proxy materials)2023 Proxy Materials), or Voting Instruction Card. With your 16-digit control number found in these materials, you can access the webcast at: • | For holders of PG&E Corporation common shares, you can access the 2021 Annual Meetings at www.virtualshareholdermeeting.com/PCG2021. | • | For holders of Utility preferred shares, you can access the 2021 Annual Meetings at www.virtualshareholdermeeting.com/PCG-P2021. | • | If you hold both PG&E Corporation common shares and Utility preferred shares, you can view the webcast in one browser using either URL; however, in order to vote you are required to log into each company’s website separately, as discussed below in “How do I vote.” |
• Holders of PG&E Corporation common shares - access the 2023 Annual Meetings at virtualshareholdermeeting.com/PCG2023. • Holders of Utility preferred shares - access the 2023 Annual Meetings at virtualshareholdermeeting.com/PCG-P2023. • Holders of both PG&E Corporation common shares and Utility preferred shares - in order to vote you are required to log into each company’s website separately, as discussed below in “How do I vote.” You can view the video cast in one browser using either URL. We encourage you to access the 20212023 Annual Meetings approximately 15 minutes prior to the start of the meetings to allow ample time to check in. If you encounter any difficulties during the check-in process or meetings, please call the technical support number posted on the 20212023 Annual MeetingsMeetings' log-in page. Who can participate in the 2021 Annual Meetings?
| | | | Who can participate in the 2023 Annual Meetings? |
Only PG&E Corporation and Utility shareholders who held shares as of the Record Date (March 22, 2021)20, 2023), or their duly appointed legal proxies, may participateattend and vote in the 20212023 Annual Meetings. How do I vote?
We encourage you to vote by proxy over the Internet, telephone, or mail prior to the 20212023 Annual Meetings even if you plan to participate.attend. If your shares are registered to you directly, there are three ways to submit your Proxy:  | | | | | | | Over the Internet.Internet: You may submit your Proxy and vote your shares over the Internet by going to www.proxyvote.com.proxyvote.com. Voting instructions are provided on either your Notice of Internet Access or, if you received your Proxy Materials by mail, or your Proxy Card. | | By telephone. telephone: If you received your 2023 Proxy Materials by mail, you may submit your Proxy and vote your shares by calling the toll-free number on the Proxy Card. | | By mail. mail: If you received your proxy materials2023 Proxy Materials by mail, you may submit your Proxy and vote your shares by completing, signing, and dating the Proxy Card and mailing it in the postage-paid envelope provided. |
2021 Joint Proxy Statement | 107 |
You can also vote during the 20212023 Annual Meetings with your 16-digit control number. For holders of PG&E Corporation shares, you can access the 20212023 Annual Meetings and vote your shares at www.virtualshareholdermeeting.com/PCG2021. virtualshareholdermeeting.com/PCG2023. For holders of Utility shares, you can access the 20212023 Annual Meetings and vote your shares at www.virtualshareholdermeeting.com/PCG-P2021. virtualshareholdermeeting.com/PCG-P2023.
If you hold shares of both PG&E Corporation and the Utility, we encourage you to vote prior to the 20212023 Annual Meetings to ensure that you have time to participate in the meetings. To vote your Corporation and Utility shares at the 20212023 Annual Meetings, you will be required to log in with your 16-digit control number to each company’s website separately. You can still view the webcast in one browser. If your shares are not registered to you directly but are held indirectly through a broker, bank, trustee, nominee, or other third party (“broker”), follow the instructions provided by your broker to vote your shares. If you do not submit voting instructions to your broker, the broker will not be permitted to vote your shares on any proposal, unless it constitutes a “routine” itemproposal and your broker is a member of the NYSE and permitted by NYSE rules to vote on “routine” items.proposals. The election of directors, the say-on-pay vote, and equity plan proposals, for example, are “non-routine” items.proposals. If you are a 401(k) Plan participant, specific instructions for voting are noted on the Voting Instruction Card. What is the voting deadline?
| | | | | | | 2023 Joint Proxy Statement | 91 |
| | | | What is the voting deadline? |
Registered shareholders - If you hold your shares directly and submit your Proxy over the Internet or by telephone, your vote must be received by 11:59 p.m., Eastern time, on Wednesday, May 19, 2021.17, 2023. These Internet and telephone voting procedures comply with California law. If you submit your Proxy by mail, your vote must be received by 10:00 a.m., Pacific time, on Thursday, May 20, 2021. 18, 2023. Plan participants - If you are a participant in a 401(k) Plan, your voting instructionsVoting Instruction Card must be received by 11:59 p.m., Eastern time, on Monday, May 17, 2021,15, 2023, for the 401(k) Plan trustee to vote your shares. Beneficial shareholders - If your shares otherwise are not registered to you directly but are registered in the name of your nominee (such as a broker, bank, trustee, or other third party), please consult information provided by the nominee. If you participate in the 20212023 Annual Meetings, via webcast, you can vote your shares until the voting is closed. Can I change my vote?
If your shares are registered to you directly, you can change your vote or revoke your Proxy any time before it is exercised by doing one of the following before the applicable deadline: (1) returning a signed Proxy Card with a later date, (2) entering a new vote over the Internet or by telephone, (3) notifying the Corporate Secretary of PG&E Corporation or the Utility, as appropriate, in writing, at 77 Beale Street, P.O. Box 770000, San Francisco,300 Lakeside Drive, Oakland, California 94177,94612, or (4) voting during the 20212023 Annual Meetings until voting is closed. Your participation inattendance at the 20212023 Annual Meetings will not automatically revoke your Proxy unless you vote again during the 20212023 Annual Meetings. If you are a participant in a 401(k) Plan, you may change your vote at any time prior to 11:59 p.m., Eastern time, on Monday, May 17, 2021.15, 2023. The last vote that the 401(k) Plan trustee receives from you within this timeframe will be the vote that is counted. Participants in a 401(k) Plan are not eligible to vote during the 20212023 Annual Meetings. If your shares otherwise are not registered to you directly but are registered in the name of your nominee (such as a broker, bank, trustee, or other third party), follow the instructions provided by your nominee to change your vote or revoke your voting instructions. 2021 Joint Proxy Statement | 108 |
| | | | What vote is required to approve each proposal? |
What am I voting on, and what are each Board’s voting recommendations?
PG&E Corporation shareholders will be voting on the following items and the Board of the Corporation unanimously recommends that you vote as follows:
Item No. | | Description | | Board’s Voting
Recommendation | 1 | | Election of 7 directors(1) | | FOR all nominees | 2 | | Ratification of Deloitte & Touche LLP as Independent Auditor for 2021 | | FOR this proposal | 3 | | Advisory vote to approve executive compensation | | FOR this proposal | 4 | | Management proposal to approve the PG&E Corporation 2021 Long-Term Incentive Plan | | FOR this proposal |
(1) | As of the date of this Proxy Statement, no other candidates have been nominated for election at the 2021 Annual Meetings in opposition to the Corporation Board nominees. |
The Utility’s shareholders will be voting on the following items and the Board of the Utility unanimously recommends that you vote as follows:
Item No.(2) | | Description | | Board’s Voting
Recommendation | 1 | | Election of 8 directors | | FOR all nominees | 2 | | Ratification of Deloitte & Touche LLP as Independent Auditor for 2021 | | FOR this proposal | 3 | | Advisory vote to approve executive compensation | | FOR this proposal |
(2) | There is no Item No. 4 proposal for the Utility. |
What vote is required to approve each item?
A majority voting standard applies to the election of each director nominee and to the approval of Item Nos.Proposals 2, 3, and 4. Under a majority voting standard, approval occurs if the shares voted “for” a director nominee or other item exceedproposal are a majority of the number of shares voted “against”represented and voting at that nominee or item.annual meeting. In addition, the shares voting affirmatively must equal at least a majority of the quorum that is required to conduct business at each meeting.meeting, which is 50 percent of the outstanding shares entitled to vote. This means that the shares voting affirmatively must be greater than 25 percent of the outstanding shares entitled to vote. When determining whether a majority of the votes cast have approved the PG&E Corporation 2021 Long-Term Incentive Plan (“2021 LTIP”), an “abstention” will have the same effect as a vote against the 2021 LTIP.
In determining whether a majority of the shares represented and voting have elected a director nominee or approved any other proposal, abstentions, votes “withheld,” and any broker non-votes (see the definition below under “What is a broker non-vote?”) will not be considered. For all matters subject to a majority voting standard, (other than the 2021 LTIP proposal), abstentions and broker non-votes that occur with respect to the election of a director nominee or a proposal could prevent the election of a nominee or the approval of a proposal if the number of shares voting affirmatively does not constitute a majority of the required quorum. Abstentions and broker non-votes will be treated as present for the purpose of determining whether a quorum is present at each meeting. Where shareholders are being asked for an advisory vote or for ratification (Item No.or approval (Proposals 2, 3 and 3)4), any voting results with respect to these itemsproposals will be non-binding on the affected company but will be considered by that company’s Board. 2021 Joint Proxy Statement | 109 |
| | | | What is a broker non-vote? |
What is a broker non-vote?
If you hold your shares indirectly through your broker, then your broker is the registered holder of your shares and submits the Proxy to vote your shares. You are the beneficial owner of the shares, and typically you will be asked to provide your broker with instructions as to how you want your shares to be voted. Under the rules of the NYSE, if you fail to provide your broker with voting instructions, your broker can use its discretion to vote your shares on “routine” matters, likesuch as the ratification of the appointment of the Independent Auditor. However, your broker may not use its discretion to vote your shares on “non-routine” matters, likesuch as director elections or advisory votes onto approve executive compensation and equity-plan proposals.(say on pay) or the frequency of say on pay. When a broker votes your shares on routine matters but is unable to vote your shares on other non-routine matters because you have failed to provide instructions on how to vote any non-routine matters, a “broker non-vote” occurs with respect to these other non-routine matters. What shares am I entitled to vote?
| | | | What shares am I entitled to vote? |
If you are a PG&E Corporation registered shareholder or a Utility registered shareholder, you are entitled to vote all the shares of PG&E Corporation common stock that you own (or for which you have been given the right to provide instructions as to how such shares should be voted) as of the close of business on March 22, 2021 (Record Date). If you are a Utility registered shareholder, you are entitled to vote all the shares of Utility preferred stock that you own (or for which you have been given the right to provide instructions as to how such shares should be voted) as of the Record Date. If you are a registered holder of both PG&E Corporation common stock and Utility preferred stock, you are entitled to vote separately on each company’s proposals. We encourage shareholders to submit proxiestheir Proxies in advance of the 20212023 Annual Meetings over the Internet, by telephone, or by mail. You can help ensure that your shares are voted at the 20212023 Annual Meetings by following the instructions on the enclosedyour Notice of Internet
| | | | | | | 2023 Joint Proxy Statement | 92 |
Availability of your Proxy Card (if you received materials by mail) and submitting your votes over the Internet or by telephone, or by completing, signing, dating and returning the enclosedyour Proxy Card. Is my vote confidential?
PG&E Corporation and the Utility each have adopted a confidential voting policy under which shareholder votes are revealed only to a non-employee proxy tabulator or an independent inspector of election, except (1) as necessary to meet legal requirements, (2) in a dispute regarding authenticity of proxies and ballots, (3) in the event of a proxy contest if the other party does not agree to comply with the confidential voting policy, and (4) where disclosure may be necessary for either company to assert or defend claims. The policy allows the companies to engage shareholders, and to directly or indirectly (1) accept voting information that is voluntarily provided by shareholders, or (2) request and obtain final shareholder voting information that is or will be publicly disclosed pursuant to law, regulation, or similar requirements. Who will count the votes?
| | | | Who will count the votes? |
Broadridge FinancialInvestor Communication Solutions, Inc. (“Broadridge”) will act as the proxy tabulators and the inspectors of election for the 20212023 Annual Meetings. Broadridge Financial Solutions, Inc. is independent of PG&E Corporation and the Utility and their respective directors, officers, and employees. Broadridge Financial Solutions, Inc. will also be the voting instruction tabulator for the 401(k) Plan. How will the 2021 Annual Meetings be conducted?
| | | | How will the 2023 Annual Meetings be conducted? |
The independent non-executive Chair of the Board of PG&E Corporation, or his designee, will preside over the 20212023 Annual Meetings and will make any and all determinations regarding the conduct of the meetings. All items of businessproposals described in this Proxy Statement will be deemed presented at the 20212023 Annual Meetings. There will be a general question and answer period. Questions and comments should pertain to corporate performance, itemsproposals for consideration at the 20212023 Annual Meetings, or other matters of interest to shareholders generally. The meetings are not a forum to present general economic, political, or other views that are not directly related to the business of the Corporation or the Utility. 2021 Joint Proxy Statement | 110 |
| | | | Are the 2023 Proxy Materials for the 2023 Annual Meetings available online? |
Are the 2021 Proxy Materials for the 2021 Annual Meetings available online?
Yes. You can go online at investor.pgecorp.com/financials/annual-reports-and-proxy-statementsto access the 20212023 Proxy Materials. How many copies of the 2021 Proxy Materials will I receive?
| | | | How many copies of the 2023 Proxy Materials will I receive? |
Registered Holders and 401(k) Plan Participants You will receive one Notice of Internet Availability for each account, unless you have requested paper copies of the proxy materials, in which case you will receive one copy of the 20212023 Proxy Materials for each account. If you receive your proxy materials through Broadridge, Investor Communication Solutions (“Broadridge”), and there are multiple beneficial owners at the same address, you may receive fewer Notices of Internet Availability or fewer copies of the 20212023 Proxy Materials than the number of beneficial owners at that address. SEC rules permit Broadridge to deliver only one Notice of Internet Availability or only one copy of the 20212023 Proxy Materials to multiple beneficial owners sharing an address unless the applicable company receives contrary instructions from any beneficial owner at that address. If you receive your proxy materials through Broadridge and (1) you currently receive only one copy of the Notice of Internet Availability or only one copy of the 20212023 Proxy Materials at a shared address but you wish to receive an additional copy of the Notice of Internet Availability or of the 20212023 Proxy Materials or any future notices or proxy materials, or (2) you share an address with other beneficial owners who also receive their separate notices of Internet availability or proxy materials through Broadridge and you wish to request delivery of a single copy of any notice of Internet availability or of the proxy materials to the shared address in the future, please contact Broadridge by calling 1-866-540-7095 or mailing Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New YorkNY 11717. What does it mean if I receive more than one Notice of Internet Availability or Proxy Card on or about the same time?
| | | | What does it mean if I receive more than one Notice of Internet Availability or Proxy Card on or about the same time? |
It means that your PG&E Corporation common shares or Utility preferred shares are registered differently or are in more than one account. In order to vote all of your shares, please sign and return each Proxy Card or, if you vote over the Internet, by telephone or during the 20212023 Annual Meetings, vote once for each Notice of Internet Availability or Proxy Card you receive. What if I submit my Proxy but I do not specify how I want my shares voted?
| | | | | | | 2023 Joint Proxy Statement | 93 |
| | | | What if I submit my Proxy or Voting Instruction Card, but I do not specify how I want my shares voted? |
For PG&E Corporation’s registered shareholders, the Corporation’s proxy holders will vote your shares in accordance with the Corporation Board’s recommendations, which are as follows: “For” each of the Corporation Board’s nominees for director and “For” Item Nos.Proposals 2, 3, and 4. For the Utility’s registered shareholders, the Utility’s proxy holders will vote your shares in accordance with the Utility Board’s recommendations, which are as follows: “For” each of the Utility Board’s nominees for director and “For” Item Nos.Proposals 2, 3, and 3.2021 Joint Proxy Statement | 111 |
4.For 401(k) participants, if you sign but do not otherwise complete your Voting Instruction Card, you will be instructing the Trustee to vote all shares in accordance with the recommendation of the PG&E Corporation Board of Directors. | | | | What if I do not submit my Proxy or Voting Instruction Card? |
What if I do not submit my Proxy or Voting Instruction Card?
If you are a registered shareholder, your shares will not be voted if you do not submit your Proxy or vote during the virtual 20212023 Annual Meetings. If you are a participant in a 401(k) Plan, your shares will not be voted if you do not submit your Voting Instruction Card. If you hold your shares through a broker (or other intermediary), your broker may vote your shares in the broker’s discretion on “routine” matters, as discussed above under “What is a broker non-vote?” Your vote is extremely important. Even if you plan to participate in the 20212023 Annual Meetings, we request that you act promptly to vote your shares by completing, signing and dating the enclosed Proxy Card and returning it in the enclosed postage-paid envelope, or by voting over the Internet or by telephone by following the instructions provided on the enclosed Notice of Internet Availability, Proxy Card or Voting Instruction Card. How many shares are entitled to vote at the 2021 Annual Meetings?
| | | | How many shares are entitled to vote at the 2023 Annual Meetings? |
As of the Record Date, there were 1,985,105,7031,995,760,649 PG&E Corporation common shares, without par value, outstanding and entitled to vote. Each share is entitled to one vote. As of the Record Date, there were 10,319,782 Utility first preferred shares, $25 par value, and 264,374,809 Utility common shares, $5 par value, outstanding and entitled to vote. Each share is entitled to one vote. How much will this Proxy solicitation cost?
| | | | How much will this Proxy solicitation cost? |
All costs of soliciting Proxies on behalf of PG&E Corporation and the Utility will be borne by PG&E Corporation and the Utility. PG&E Corporation and the Utility hired Broadridge Financial Solutions, Inc.D.F. King to assist in the proxy solicitation of votes for a fee of $17,000 plus reasonable out-of-pocket expenses. In addition, the Corporation and the Utility will reimburse brokerage houses and other custodians, nominees, and fiduciaries for reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to shareholders. The companies’ solicitation of Proxies also may be made in person, by telephone, or by electronic communications by the companies’ respective directors, officers, and employees, who will not receive additional compensation for those solicitation activities. 2021 | | | | How do I correspond with Directors? |
Correspondence from shareholders and other interested persons to directors and executive officers should be sent to the applicable company’s principal executive office, in care of the Corporate Secretary. Section 34 of each company’s Guidelines provides more details on these communications. Consistent with procedures adopted and approved by each company’s Board, the Corporate Secretary will forward to the applicable independent non-executive Chair any communications addressed to either Board as a body or to all of the independent or non-management directors in their entirety, and such other communications as the Corporate Secretary, in his or her discretion, determines is appropriate. The Corporate Secretary also will receive communications directed to individual directors or officers, including each company’s independent non-executive Chair, and will forward those as appropriate. You can reach the principal executive office for each company by: | | | | | | | | | | E-Mail: | CorporateSecretary@pge.com | | U.S. Mail: | Office of the Corporate Secretary PG&E Corporation/ Pacific Gas and Electric Company
300 Lakeside Drive Oakland, CA 94612 |
| | | | | | | 2023 Joint Proxy Statement | 11294 |
2024 ANNUAL MEETINGS | | | | What is the date of the 2024 annual meetings? |
2022 ANNUAL MEETINGS
What is the date of the 2022 annual meetings?
PG&E Corporation and the Utility currently anticipate that the date of their 20222024 annual meetings will be roughly one year after the date of the 20212023 Annual Meetings. Exact dates will be communicated to shareholders in the proxy materials for those meetings. Can I submit nominees for inclusion in proxy materials for the 2022 annual meetings?
| | | | Can I submit nominees for inclusion in PG&E's proxy materials for the 2024 annual meetings? |
PG&E Corporation’s bylaws include proxy access provisions. Under these provisions, shareholders of PG&E Corporation who meet the requirements set forth in the bylaws may submit director nominations for inclusion in the Corporation’s proxy materials. Proxy access nominations for the Corporation’s 20222024 annual meeting must be provided to the PG&E Corporation Corporate Secretary no earlier than November 9, 2021,8, 2023, and no later than December 9, 2021,8, 2023, and must meet all requirements set forth in the bylaws. However, if the Corporation’s 20222024 annual meeting is scheduled on a date that is more than 30 days before or after the anniversary date of the 20212023 Annual Meetings, a proxy access nomination for the 20222024 meeting generally will be timely if it is received no later than the close of the business on the date that is 180 days prior to the 20222024 annual meeting date or the 10th day after the date on which the date of the 20222024 annual meeting is disclosed, whichever is later. The Utility did not adopt proxy access bylaw provisions, given the fact that over 95 percent of the Utility’s common stock is held by PG&E Corporation; no Utility shareholders may submit director nominations via proxy access.Can shareholders introduce proposals (other than proxy access proposals, but including director nominations) during the 2022 annual meetings?
| | | | Can shareholders introduce proposals (other than proxy access proposals, but including director nominations) during the 2024 annual meetings? |
If you are a shareholder of PG&E Corporation or the Utility and would like to introduce a proposal or other business (including director nominations other than those nominated by the companies) during that company’s 20222024 annual meeting, each company’s bylaws require that your proper advance written notice of the matter be received at the principal executive office of the applicable company no earlier than January 20, 2022,19, 2024, and no later than 5:00 p.m., Pacific time, on February 19, 2022.18, 2024. However, if the 20222024 annual meeting of either company is scheduled on a date that differs by more than 30 days from the anniversary date of the 20212023 Annual Meetings, your notice will be timely if it is received no later than the 10th day after the date on which that company publicly discloses the date of its 20222024 annual meeting. You must also provide information regarding your proposal, and satisfy other requirements as set forth in the applicable company’s bylaws. If your proposal involves nominating an individual for director during the annual meetings, certain additional information regarding the nominees and the nomination must be provided in your advance written notice regarding the nominee, which must be submitted in accordance with procedures set forth in the applicable company’s bylaws. What is
In addition, shareholders who intend to solicit proxies in support of director nominees other than either company’s nominees must comply with the submission deadline if I want my shareholder proposal to be included in the proxy statement for the 2022 annual meetings?additional requirements of Rule 14a-19(b).
| | | | What is the submission deadline if I want my shareholder proposal to be included in the proxy statement for the 2024 annual meetings? |
If you would like to submit a proposal to be included in the proxy statement for PG&E Corporation’s or the Utility’s 20222024 annual meeting pursuant to SEC Rule 14a-8, the applicable company’s Corporate Secretary must receive your proposal no later than December 9, 2021.2021 Joint Proxy Statement | 113 |
8, 2023. | | | | How and where can I make a submission? |
How and where can I make a submission?
If you wish to submit advance notice of any business to be brought before the 20222024 annual meetings (including notice of any proxy access nominees), or a shareholder proposal for inclusion in the 20222024 joint proxy statement, you may submit such notice or proposal via e-mail, fax, or U.S. mail (all shown below). If you submit a notice or proposal via U.S. mail, we recommend that you use a delivery method that indicates when your submission was received at the principal executive office of the applicable company. E-Mail: CorporateSecretary@pge.com
Fax: 415-973-8719
U.S. Mail:
Office of the Corporate Secretary
PG&E Corporation/Pacific Gas and Electric Company
P.O. Box 770000
San Francisco, California 94177
2021 | | | | | | | | | | E-Mail: | CorporateSecretary@pge.com | | U.S. Mail: | Office of the Corporate Secretary PG&E Corporation/ Pacific Gas and Electric Company
300 Lakeside Drive Oakland, CA 94612 |
| | | | | | | 2023 Joint Proxy Statement | 11495 |
Appendix A: PG&E Corporation 2021 Long-Term Incentive Plan
(As adopted effective [ ], 2021)
1. | Establishment, Purpose and Term of Plan. |
| | | | | 1.1 | Establishment. The PG&E Corporation 2021 Long-Term Incentive Plan, as amended from time to time (the “Plan”), is hereby established effective as of the later of the date approved by the shareholders of the Company or June 1, 2021 (the “Effective Date”). This Plan replaces the PG&E Corporation 2014 Long-Term Incentive Plan. | | 1.2 | Purpose. The purpose of the Plan is to advance the interests of the Participating Company Group and its shareholders by providing an incentive to attract and retain the best qualified personnel to perform services for the Participating Company Group, by motivating such persons to contribute to the growth and profitability of the Participating Company Group, by aligning their interests with interests of the Company’s shareholders, and by rewarding such persons for their services by tying a significant portion of their total compensation package to the success of the Company. The Plan seeks to achieve this purpose by providing for Awards in the form of Options, Stock Appreciation Rights, Restricted Stock Awards, Performance Shares, Performance Units, Restricted Stock Units, Deferred Compensation Awards and other Stock-Based Awards as described below. | | 1.3 | Term of Plan. The Plan shall continue in effect until the earlier of its termination by the Board or the date on which no Awards remain outstanding under the Plan. However, the term during which all Awards shall be granted, if at all, shall be within ten (10) years from the Effective Date. Moreover, Incentive Stock Options shall not be granted later than March 3, 2031 (ten (10) years from the date on which the Plan was adopted by the Board). | | | |
2. | Definitions and Construction. |
| | | | 2.1 | Definitions. Whenever used herein, the following terms shall have their respective meanings set forth below: |
| (a) | “Affiliate” means (i) an entity that directly, or indirectly through one or more intermediary entities, controls the Company or (ii) an entity that is controlled by the Company directly, or indirectly through one or more intermediary entities. For this purpose, the term “control” (including the term “controlled by”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the relevant entity, whether through the ownership of voting securities, by contract or otherwise; provided that “affiliate” also shall have such other meaning assigned such term for the purposes of registration on Form S-8 under the Securities Act. | | (b) | “Award” means any Option, SAR, Restricted Stock Award, Performance Share, Performance Unit, Restricted Stock Unit or Deferred Compensation Award or other Stock-Based Award granted under the Plan. | | (c) | “Award Agreement” means a written agreement between the Company and a Participant setting forth the terms, conditions and restrictions of the Award granted to the Participant (which may also be in electronic form). | | (d) | “Board” means the Board of Directors of the Company. | | (e) | “Change in Control” means, unless otherwise defined by the Participant’s Award Agreement or contract of employment or service, the occurrence of any of the following: |
| (i) | any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any benefit plan for Employees or any trustee, agent or other fiduciary for any such plan acting in such person’s capacity as such fiduciary), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), of stock of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding voting stock; or |
20212023 Joint Proxy Statement | A-196 |
| (ii) | during any two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority of the Board, unless the election, or the nomination for election by the shareholders of the Company, of each new Director was approved by a vote of at least two-thirds (2/3) of the Directors then still in office (1) who were Directors at the beginning of the period or (2) whose election or nomination was previously so approved; or | | | | (iii) | the consummation of any consolidation or merger of the Company other than a merger or consolidation which would result in the holders of the voting stock of the Company outstanding immediately prior thereto continuing to directly or indirectly hold at least seventy percent (70%) of the Combined Voting Power of the Company, the surviving entity in the merger or consolidation or the parent of such surviving entity outstanding immediately after the merger or consolidation; or | | (iv) | (1) the consummation of any sale, lease, exchange or other transfer (in one or a series of related transactions) of all or substantially all of the assets of the Company, or (2) the approval of the Shareholders of the Company of a plan of liquidation or dissolution of the Company. | | | For purposes of paragraph (iii), the term “Combined Voting Power” shall mean the combined voting power of the Company’s or other relevant entity’s then outstanding voting stock. |
| (f) | “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder. | | (g) | “Committee” means the Compensation Committee or other committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the Board. If no committee of the Board has been appointed to administer the Plan, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers. | | (h) | “Company” means PG&E Corporation, a California corporation, or any successor corporation thereto. | | (i) | “Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee or a member of the Board) to a Participating Company, provided that the identity of such person, the nature of such services, or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on registration on a Form S-8 Registration Statement under the Securities Act. | | (j) | “Deferred Compensation Award” means an award of Stock Units granted to a Participant pursuant to Section 12 of the Plan. | | (k) | “Director” means a member of the Board. | | (l) | “Disability” means the permanent and total disability of the Participant, within the meaning of Section 22(e)(3) of the Code, except as otherwise set forth in the Plan or an Award Agreement. | | (m) | “Dividend Equivalent” means a credit, made at the discretion of the Committee or as otherwise provided by the Plan, to the account of a Participant in an amount equal to the cash dividends paid on one share of Stock for each share of Stock represented by an Award held by such Participant. | | (n) | “Employee” means any person treated as an employee (including an Officer or a member of the Board who is also treated as an employee) in the records of a Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes of Section 422 of the Code; provided, however, that neither service as a member of the Board nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan. The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s rights, if any, under the Plan as of the time of the Company’s determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination. | | (o) | “Exchange Act” means the Securities Exchange Act of 1934, as amended. |
20212023 Joint Proxy Statement | A-2 |
| (p) | “Fair Market Value” means, as of any date, the value of a share of Stock or other property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following: |
| (i) | Except as otherwise determined by the Committee, if, on such date, the Stock is listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock as quoted on the New York Stock Exchange or such other national or regional securities exchange or market system constituting the primary market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its discretion. | | (ii) | Notwithstanding the foregoing, the Committee may, in its discretion, determine the Fair Market Value on the basis of the opening, closing, high, low or average sale price of a share of Stock or the actual sale price of a share of Stock received by a Participant on such date, the preceding trading day, the next succeeding trading day, or an average determined over a period of trading days. The Committee may vary its method of determination of the Fair Market Value as provided in this Section for different purposes under the Plan. | | (iii) | If, on such date, the Stock is not listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be as determined by the Committee in good faith without regard to any restriction other than a restriction that, by its terms, will never lapse. |
| (q) | “Incentive Stock Option” means an Option intended to be (as set forth in the Award Agreement) and which qualifies as an incentive stock option within the meaning of Section 422(b) of the Code. | | (r) | “Insider” means an Officer, a Director or any other person whose transactions in Stock are subject to Section 16 of the Exchange Act. | | (s) | “Net-Exercise” means a procedure by which the Participant will be issued a number of shares of Stock determined in accordance with the following formula: | | | X = Y(A-B)/A, where | | | X = the number of shares of Stock to be issued to the Participant upon exercise of the Option; | | | Y = the total number of shares with respect to which the Participant has elected to exercise the Option; | | | A = the Fair Market Value of one (1) share of Stock; | | | B = the exercise price per share (as defined in the Participant’s Award Agreement). | | (t) | “Non-employee Director” means a Director who is not an Employee. | | (u) | “Non-employee Director Award” means an Award granted to a Non-employee Director pursuant to Section 7 of the Plan. | | (v) | “Nonstatutory Stock Option” means an Option not intended to be (as set forth in the Award Agreement) an incentive stock option within the meaning of Section 422(b) of the Code. | | (w) | “Officer” means any person designated by the Board as an officer of the Company. | | (x) | “Option” means the right to purchase Stock at a stated price for a specified period of time granted to a Participant pursuant to Section 6 or Section 7 of the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option. | | (y) | “Option Expiration Date” means the date of expiration of the Option’s term as set forth in the Award Agreement. | | (z) | “Parent Corporation” means any present or future “parent corporation” of the Company in an unbroken chain of corporations ending with the Company in which each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. |
| (aa) | “Participant” means any eligible person who has been granted one or more Awards. |
2021 Joint Proxy Statement | A-3 |
| (bb) | “Participating Company” means the Company or any Affiliate. | | (cc) | “Participating Company Group” means, at any point in time, all entities collectively that are then Participating Companies. | | (dd) | “Performance Award” means an Award of Performance Shares or Performance Units. | | (ee) | “Performance Award Formula” means, for any Performance Award, a formula or table established by the Committee pursuant to Section 10.3 of the Plan that provides the basis for computing the value of a Performance Award at one or more levels of attainment of the applicable Performance Goal(s) measured as of the end of the applicable Performance Period. | | (ff) | “Performance Goal” means a performance goal established by the Committee pursuant to Section 10.3 of the Plan. | | (gg) | “Performance Period” means a period established by the Committee pursuant to Section 10.3 of the Plan at the end of which one or more Performance Goals are to be measured. | | (hh) | “Performance Share” means a bookkeeping entry representing a right granted to a Participant pursuant to Section 10 of the Plan to receive a payment equal to the value of a share of Stock, based upon performance. | | (ii) | “Performance Unit” means a bookkeeping entry representing a right granted to a Participant pursuant to Section 10 of the Plan to receive a payment equal to a cash value as determined by the Committee, based upon performance. | | (jj) | “Prior Plan” means the PG&E Corporation 2014 Long-Term Incentive Plan. | | (kk) | “Restricted Stock Award” means an Award of Restricted Stock. | | (ll) | “Restricted Stock Unit” or “Stock Unit” means a bookkeeping entry representing a right granted to a Participant pursuant to Section 11 or Section 12 of the Plan, respectively, to receive a share of Stock or payment equal to the value of a share of Stock on a date determined in accordance with the provisions of Section 11 or Section 12, as applicable, and the Participant’s Award Agreement. | | (mm) | “Restriction Period” means the period established in accordance with Section 9.4 of the Plan during which shares subject to a Restricted Stock Award are subject to Vesting Conditions. | | (nn) | “Retirement” means termination as an Employee with the Participating Company Group at age 55 or older, provided that the Participant was an Employee for at least five consecutive years prior to the date of such termination. | | (oo) | “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation. | | (pp) | “SAR” or “Stock Appreciation Right” means a bookkeeping entry representing, for each share of Stock subject to such SAR, a right granted to a Participant pursuant to Section 8 of the Plan to receive payment in any combination of shares of Stock or cash of an amount equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. | | (qq) | “Securities Act” means the Securities Act of 1933, as amended. | | (rr) | “Separation from Service” means a Participant’s “separation from service,” within the meaning of Section 409A of the Internal Revenue Code. | | (ss) | “Service” means a Participant’s employment or service with the Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant. A Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders such Service or a change in the Participating Company for which the Participant renders such Service, provided that there is no interruption or termination of the Participant’s Service. Furthermore, a Participant’s Service shall not be deemed to have terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company. However, if any such leave taken by a Participant exceeds ninety (90) days, then on the ninety-first (91st) day following the commencement of such leave, the Participant’s Service shall be deemed terminated, and any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and instead shall be treated thereafter as a Nonstatutory Stock Option commencing on the third (3rd) month from such deemed termination, unless the Participant’s right to return to Service with the Participating Company Group is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining vesting under the Participant’s Award Agreement. A |
2021 Joint Proxy Statement | A-4 |
| | Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the entity for which the Participant performs Service ceasing to be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of such termination. | | (tt) | “Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 4.2 of the Plan. | | (uu) | “Stock-Based Awards” means any award that is valued in whole or in part by reference to, or is otherwise based on, the Stock, including dividends on the Stock, but not limited to those Awards described in Sections 6 through 12 of the Plan. | | (vv) | “Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company in an unbroken chain of corporations beginning with the Company in which each of the corporations other than the last corporation owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. | | (ww) | “Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or any Subsidiary Corporation or with which the Company or any Subsidiary Corporation combines. | | (xx) | “Ten Percent Owner” means a Participant who, at the time an Option is granted to the Participant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of a Parent Corporation or Subsidiary Corporation that is a Participating Company within the meaning of Section 422(b)(6) of the Code. | | (yy) | “Vesting Conditions” mean those conditions established in accordance with Section 9.4 or Section 11.2 of the Plan prior to the satisfaction of which shares subject to a Restricted Stock Award or Restricted Stock Unit Award, respectively, remain subject to forfeiture or a repurchase option in favor of the Company upon the Participant’s termination of Service, or other deadline for satisfying such conditions, as applicable. |
| 2.2 | Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. |
| 3.1 | Administration by the Committee. The Plan shall be administered by the Committee. All questions of interpretation of the Plan or of any Award shall be determined by the Committee, and such determinations shall be final and binding upon all persons having an interest in the Plan or such Award. | | 3.2 | Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election that is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, determination or election. In addition, to the extent specified in a resolution adopted by the Board, the Chief Executive Officer of the Company shall have the authority to grant Awards to an Employee who is not an Insider and who is receiving a salary below the level that requires approval by the Committee provided that the terms of such Awards conform to guidelines established by the Committee. | | 3.3 | Administration with Respect to Insiders. With respect to participation by Insiders in the Plan, at any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule 16b-3. | | 3.4 | Powers of the Committee. In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Committee shall have the full and final power and authority, in its discretion: |
| (a) | to determine the persons to whom, and the time or times at which, Awards shall be granted and the number of shares of Stock or units to be subject to each Award based on the recommendation of the Chief Executive Officer of the Company, except that (i) Awards to the Chief Executive Officer shall be based on the recommendation of the independent members of the Board in compliance with applicable stock exchange rules, (ii) Non-employee Director Awards shall be granted automatically pursuant to Section 7 of the Plan, and (iii) other Awards to Non-employee Directors shall be approved by the Board; |
2021 Joint Proxy Statement | A-5 |
| (b) | to determine the type of Award granted and to designate Options as Incentive Stock Options or Nonstatutory Stock Options; | | (c) | to determine the Fair Market Value of shares of Stock or other property; | | (d) | to determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired pursuant thereto, including, without limitation, (i) the exercise or purchase price of shares purchased pursuant to any Award, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any tax withholding obligation arising in connection with any Award, including by the withholding or delivery of shares of Stock, (iv) the timing, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto, (v) the Performance Award Formula and Performance Goals applicable to any Award and the extent to which such Performance Goals have been attained, (vi) the time of the expiration of any Award, (vii) the effect of the Participant’s termination of Service on any of the foregoing, and (viii) all other terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto not inconsistent with the terms of the Plan; | | (e) | to determine whether an Award will be settled in shares of Stock, cash, or in any combination thereof; | | (f) | to approve one or more forms of Award Agreement; | | (g) | to amend, modify, extend, cancel or renew any Award or to waive any restrictions or conditions applicable to any Award or any shares acquired pursuant thereto; | | (h) | to accelerate, continue, extend or defer the exercisability or vesting of any Award or any shares acquired pursuant thereto, including with respect to the period following a Participant’s termination of Service; | | (i) | without the consent of the affected Participant and notwithstanding the provisions of any Award Agreement to the contrary, to unilaterally substitute at any time a Stock Appreciation Right providing for settlement solely in shares of Stock in place of any outstanding Option, provided that such Stock Appreciation Right covers the same number of shares of Stock and provides for the same exercise price (subject in each case to adjustment in accordance with Section 4.2) as the replaced Option and otherwise provides substantially equivalent terms and conditions as the replaced Option, as determined by the Committee, and subject to limitations set forth in Section 3.5; | | (j) | to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt sub-plans or supplements to, or alternative versions of, the Plan, including, without limitation, as the Committee deems necessary or desirable to comply with the laws or regulations of or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions whose citizens may be granted Awards; | | (k) | to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make all other determinations and take such other actions with respect to the Plan or any Award as the Committee may deem advisable, to the extent not inconsistent with the provisions of the Plan or applicable law; and | | (l) | to delegate to the Chief Executive Officer or the senior officer responsible for human resources the authority with respect to ministerial matters regarding the Plan and Awards made under the Plan. |
| 3.5 | Option or SAR Repricing/Buyout. Notwithstanding anything to the contrary set forth in the Plan, without the affirmative vote of holders of a majority of the shares of Stock cast in person or by proxy at a meeting of the shareholders of the Company at which a quorum representing a majority of all outstanding shares of Stock is present or represented by proxy, the Company shall not approve a program providing for any of the following: (a) the cancellation of outstanding Options or SARs and the grant in substitution therefore of new Options or SARs having a lower exercise price, another Award, cash or a combination thereof (other than in connection with a Change in Control), (b) the amendment of outstanding Options or SARs to reduce the exercise price thereof, (c) the purchase of outstanding unexercised Options or SARs by the Company, whether by cash payment or otherwise, if the exercise price of such Option or SAR is higher than the fair market value of an underlying share of Stock as of the date of purchase, or (d) any other action with respect to an Option or SAR that would be treated as a repricing under the rules and regulations of the principal U.S. national securities exchanges on which the Stock is listed. This paragraph shall not be construed to apply to “issuing or assuming a stock option in a transaction to which section 424(a) applies,” within the meaning of Section 424 of the Code. For the avoidance of doubt, this Section 3.5 shall not preclude any action taken without shareholder approval that is described in Section 4.2. |
2021 Joint Proxy Statement | A-6 |
| 3.6 | Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers or employees of the Participating Company Group, members of the Board or the Committee and any officers or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same. |
4. | Shares Subject to Plan. |
| 4.1 | Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock that may be issued under the Plan shall be 44 million (44,000,000), plus any shares authorized but not covered by an award under the Prior Plan as of the Effective Date. After the Effective Date, no Awards may be granted under the Prior Plan. Shares of Stock issued hereunder shall consist of authorized but unissued or reacquired shares of Stock or any combination thereof. If (i) an outstanding Award for any reason expires or is forfeited, terminated or canceled without having been exercised or settled in full, or if shares of Stock acquired pursuant to an Award subject to forfeiture or repurchase are forfeited or repurchased by the Company, the shares of Stock allocable to the terminated portion of such Award or such forfeited or repurchased shares of Stock shall again be available for issuance under the Plan; or (ii) after the Effective Date, an outstanding Award under the Prior Plan (whenever granted) for any reason expires or is forfeited, terminated or canceled without having been exercised or settled in full, or if shares of Stock acquired pursuant to an Award under the Prior Plan subject to forfeiture or repurchase are forfeited or repurchased by the Company, the shares of Stock allocable to the terminated portion of such Award or such forfeited or repurchased shares of Stock shall again be available for issuance under the Plan. Shares of Stock shall not be deemed to have been issued pursuant to the Plan (and shall again be available for issuance under the Plan) with respect to any portion of an Award (or, after the Effective Date, an award under the Prior Plan) that is settled in cash (other than in the case of Options or SARs, in which case shares of Stock having a Fair Market Value equal to the cash delivered shall be deemed issued pursuant to the Plan). Upon the exercise of an SAR (or, after the Effective Date, exercise of an SAR that was granted under the Prior Plan), the gross number of shares for which the SAR is exercised shall be deemed issued and shall not again be available for issuance under the Plan. Any Shares that are withheld by the Company or tendered by a Participant (by either actual delivery or attestation) on or after the Effective Date (i) to pay the Exercise Price of an Option granted under the Plan or the Prior Plan or (ii) to satisfy tax withholding obligations associated with an Option or SAR granted under the Plan or the Prior Plan, shall not become available again for grant under the Plan. Any Shares that were purchased by the Company on the open market on or after the Effective Date with the proceeds from the exercise of an Option granted under the Plan or the Prior Plan shall not become available for grant under the Plan. In the event that after the Effective Date, withholding tax liabilities arising in connection with an Award (other than an Option or SAR) under this Plan or the Prior Plan are satisfied by the tendering of shares of Stock (either actually or by attestation) or by the withholding of shares by the Company, then in each such case (other than in the case of such shares tendered or withheld in connection with the exercise of Options or SARs) the shares of Stock so tendered or withheld shall be added to the shares available for grant under the Plan on a one-for-one basis. | | 4.2 | Adjustments for Changes in Capital Structure. Subject to any required action by the shareholders of the Company or Section 409A of the Code, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the shareholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number and kind of shares subject to the Plan and to |
2021 Joint Proxy Statement | A-7 |
| | any outstanding Awards, in the Award limits set forth in Section 5.4, and in the exercise or purchase price per share under any outstanding Award, in order to prevent dilution or enlargement of Participants’ rights under the Plan. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any fractional share resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number. The Committee in its sole discretion, may also make such adjustments in the terms of any Award to reflect, or related to, such changes in the capital structure of the Company or distributions as it deems appropriate, including modification of Performance Goals, Performance Award Formulas and Performance Periods. The adjustments determined by the Committee pursuant to this Section 4.2 shall be final, binding and conclusive. | | 4.3 | Substitute Awards. To the extent permitted under the rules of the applicable stock exchange on which the Stock is listed, Substitute Awards shall not reduce the shares of Stock authorized for grant under the Plan, nor shall Shares subject to a Substitute Award be added to the shares of Stock available for Awards under the Plan as provided above. Additionally, subject to the rules of the applicable stock exchange on which the Stock is listed, in the event that a company acquired by the Company or any Subsidiary Corporation or with which the Company or any Subsidiary Corporation combines has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the shares authorized for grant under the Plan (and shares subject to such Awards shall not be added to the shares available for Awards under the Plan as provided in the paragraphs above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Directors prior to such acquisition or combination. |
5. | Eligibility and Award Limitations. |
| 5.1 | Persons Eligible for Awards. Awards may be granted only to Employees, Consultants and Directors (including Non-employee Directors). For purposes of the foregoing sentence, “Employees,” “Consultants” and “Directors” shall include prospective Employees, prospective Consultants and prospective Directors to whom Awards are granted in connection with written offers of an employment or other service relationship with the Participating Company Group; provided, however, that no Stock subject to any such Award shall vest, become exercisable or be issued prior to the date on which such person commences Service. A Non-employee Director Award may be granted only to a person who, at the time of grant, is a Non-employee Director. | | 5.2 | Participation. Awards other than Non-employee Director Awards are granted solely at the discretion of the Committee. Eligible persons may be granted more than one Award. However, eligibility in accordance with this Section shall not entitle any person to be granted an Award, or, having been granted an Award, to be granted an additional Award. | | 5.3 | Incentive Stock Option Limitations. |
| (a) | Persons Eligible.An Incentive Stock Option (“ISO”) may be granted only to a person who, on the effective date of grant, is an Employee of the Company, a Parent Corporation or a Subsidiary Corporation (each being an “ISO-Qualifying Corporation”). Any person who is not an Employee of an ISO-Qualifying Corporation on the effective date of the grant of an Option to such person may be granted only a Nonstatutory Stock Option. An Incentive Stock Option granted to a prospective Employee on the condition that such person become an Employee of an ISO-Qualifying Corporation shall be deemed granted effective on the date such person commences Service with an ISO-Qualifying Corporation, with an exercise price determined as of such date in accordance with Section 6.1. | | (b) | Fair Market Value Limitation.To the extent that options designated as Incentive Stock Options (granted under all stock option plans of the Participating Company Group, including the Plan) become exercisable by a Participant for the first time during any calendar year for stock having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of such options that exceeds such amount shall be treated as Nonstatutory Stock Options. For purposes of this Section, options designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of the time the option with |
2021 Joint Proxy Statement | A-8 |
| respect to such stock is granted. If the Code is amended to provide for a limitation different from that set forth in this Section, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section, the Participant may designate which portion of such Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Upon exercise, shares issued pursuant to each such portion shall be separately identified. |
| (a) | Maximum Number of Shares Issuable Pursuant to Incentive Stock Options.Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock that may be issued under the Plan pursuant to the exercise of Incentive Stock Options shall not exceed the number of shares set forth in the first sentence of Section 4.1 plus, to the extent allowable under Section 422 of the Code and the Treasury Regulations thereunder, any shares of Stock that again become available for issuance pursuant to the remaining provisions of Section 4.1. | | (b) | Non-employee Director Award Limits.The maximum aggregate value of equity- and cash-based Awards granted to any Non-employee Director for service in such capacity during any calendar year shall not exceed $750,000 (“Annual Limit”), except that, in the case of a Non-employee Director who is serving as Chairman of the Board, the Annual Limit shall be increased by 200%. The value of an equity-based Award shall be based on the Award’s grant date fair value as determined under applicable accounting standards. |
| 5.5 | Dividends and Dividend Equivalents. Notwithstanding anything herein to the contrary, cash dividends, stock and any other property (other than cash) distributed as a dividend, a Dividend Equivalent or otherwise with respect to any Award (a) shall either (i) not be paid or credited or (ii) be accumulated, (b) shall be subject to restrictions and risk of forfeiture to the same extent as the underlying Award with respect to which such cash, stock or other property has been distributed, and (c) shall be paid after such restrictions and risk of forfeiture lapse in accordance with the terms of the applicable Award Agreement. | | 5.6 | Minimum Vesting Period. Except in the case of Substitute Awards granted pursuant to Sections 4.3, any equity-based Award (including any portion thereof) shall have a minimum vesting period of one year from the date of its grant with no vesting prior to the first anniversary of the grant date. Notwithstanding the foregoing, (i) the Committee may provide in an Award Agreement or following the time of grant that the vesting of an Award shall accelerate in the event of the Participant’s death, Disability, Retirement, or a termination of Service other than for cause, and (ii) the Committee may grant Awards covering up to five percent (5%) of the total number of shares of Stock authorized under Section 4.1 of the Plan (subject to adjustment pursuant to Section 4.2 of the Plan) without respect to the minimum vesting requirements set forth in this Section 5.6. Notwithstanding the foregoing, with regard to Awards granted to a Non-employee Director, the vesting of such Awards will be deemed to satisfy the one (1) year minimum vesting requirement to the extent that the Awards vest on the earlier of the one (1) year anniversary of the date of grant and the next annual meeting of the Company’s shareholders that is at least fifty (50) weeks after the immediately preceding year’s annual meeting. |
6. | Terms and Conditions of Options. |
| Options shall be evidenced by Award Agreements specifying the number of shares of Stock covered thereby, in such form as the Committee shall from time to time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Options may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions. |
| 6.1 | Exercise Price. The exercise price for each Option shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the Option and (b) no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a share of Stock on the effective date of grant of the Option. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted as a Substitute Award, except as would result in taxation under Section 409A or loss of ISO status. |
2021 Joint Proxy Statement | A-9 |
| 6.2 | Exercisability and Term of Options. Options shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such Option; provided, however, that (a) no Option shall be exercisable after the expiration of ten (10) years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall be exercisable after the expiration of five (5) years after the effective date of grant of such Option, and (c) no Option granted to a prospective Employee, prospective Consultant or prospective Director may become exercisable prior to the date on which such person commences Service. Subject to the foregoing, unless otherwise specified by the Committee in the grant of an Option, any Option granted hereunder shall terminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in accordance with its provisions. | | 6.3 | Payment of Exercise Price. |
| (a) | Forms of Consideration Authorized. Except as otherwise provided below, payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or in cash equivalent, (ii) by tender to the Company, or attestation to the ownership, of shares of Stock owned by the Participant having a Fair Market Value not less than the exercise price, (iii) by delivery of a properly executed notice of exercise together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a “Cashless Exercise”), (iv) by delivery of a properly executed notice of exercise electing a Net-Exercise, (v) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (vi) by any combination thereof. The Committee may at any time or from time to time grant Options that do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or that otherwise restrict one or more forms of consideration. Notwithstanding the foregoing, an Award Agreement may provide that, if on the last day of the term of an Option the Fair Market Value of one share exceeds the option price per share, and the Participant has not exercised the Option (or a tandem Stock Appreciation Right, if applicable) and the Option has not expired, the Option, to the extent vested, shall be deemed to have been exercised by the Participant on such day with payment made by withholding shares otherwise issuable in connection with the exercise of the Option. In such event, the Company shall deliver to the Participant the number of shares for which the Option was deemed exercised, less the number of shares required to be withheld for the payment of the total purchase price and required withholding taxes; provided, however, any fractional share shall be settled in cash. | | (b) | Limitations on Forms of Consideration. |
| (i) | Tender of Stock. Notwithstanding the foregoing, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. | | (ii) | Cashless Exercise. The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to establish, decline to approve, or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise, including with respect to one or more Participants specified by the Company, notwithstanding that such program or procedures may be available to other Participants. |
| 6.4 | Effect of Termination of Service. |
| (a) | Option Exercisability. Subject to earlier termination of the Option as otherwise provided herein and unless otherwise provided by the Committee, an Option shall be exercisable after a Participant’s termination of Service only during the applicable time periods provided in the Award Agreement. | | (b) | Extension if Exercise Prevented by Law. Notwithstanding the foregoing, unless the Committee provides otherwise in the Award Agreement, if the exercise of an Option within the applicable time periods is prevented by the provisions of Section 15 below, the Option shall remain exercisable until three (3) months (or such longer period of time as determined by the Committee, in its discretion) after the date the Participant is notified by the Company that the Option is exercisable, but in any event no later than the earlier of the Option Expiration Date and the tenth anniversary of the date of grant of the Option. |
2021 Joint Proxy Statement | A-10 |
| (c) | Extension if Exercise Prohibited by Law. Notwithstanding the foregoing, in the event that on the last business day of the term of an Option (other than an Incentive Stock Option) the exercise of the Option is prohibited by applicable law, the term of the Option shall be extended for a period of thirty (30) days following the end of the legal prohibition. |
7. | Terms and Conditions of Non-employee Director Awards. |
Non-employee Director Awards granted under this Plan shall be automatic and non-discretionary and shall comply with and be subject to the terms and conditions set forth in this Section 7.
The grant date for all Non-employee Director awards to be made under this Section 7 shall be the later of (1) the date on which the independent inspector of election certifies the results of the annual election of directors by shareholders of PG&E Corporation, or (2) the date that this Plan becomes effective and grants can be made consistent with legal requirements; provided, however, that in extraordinary circumstances, the grant shall be delayed until the first business day of the next open trading window period following certification of the director election results, as determined by the General Counsel of PG&E Corporation (the “Grant Date”).
| 7.1 | Grant of Restricted Stock Unit. |
| (a) | Timing and Amount of Grant. Each person who is a Non-employee Director on the Grant Date (other than a Non-employee Director who is serving as the Company’s non-executive chair of the Board) shall receive a grant of Restricted Stock Units with the number of Restricted Stock Units determined by dividing $140,000 by the Fair Market Value of the Stock on the Grant Date (rounded down to the nearest whole Restricted Stock Unit). A Non-employee Director who also serves as the Company’s non-executive chair of the Board on the Grant Date shall receive a grant of Restricted Stock Units with the number of Restricted Stock Units determined by dividing $220,000 by the Fair Market Value of the Stock on the Grant Date (rounded down to the nearest whole Restricted Stock Unit). The Restricted Stock Units awarded to a Non-employee Director shall be credited to the director’s Restricted Stock Unit account. Each Restricted Stock Unit awarded to a Non-employee Director in accordance with this Section 7.1(a) shall be deemed to be equal to one (1) (or fraction thereof) share of Stock on the Grant Date, and the value of the Restricted Stock Unit shall thereafter fluctuate in value in accordance with the Fair Market Value of the Stock. No person shall receive more than one grant of Restricted Stock Units pursuant to this Section 7.1(a) during any calendar year. | | (b) | Dividend Rights. Each Non-employee Director’s Restricted Stock Unit account shall be credited quarterly on each dividend payment date with additional Restricted Stock Units (including fractions computed to three decimal places) determined by dividing (1) the amount of cash dividends paid on such date with respect to the number of shares of Stock represented by the Restricted Stock Units previously credited to the account by (2) the Fair Market Value per share of Stock on such date. Such additional Restricted Stock Units shall be subject to the same terms and conditions and shall be settled in the same manner and at the same time as the Restricted Stock Units originally subject to the Restricted Stock Unit Award. | | (c) | Vesting and Settlement of Restricted Stock Units. Restricted Stock Units shall vest on the earlier of (i) the first anniversary of the Grant Date or (ii) the last day of the director’s elected term (the normal vesting date). Restricted Stock Units credited to a Non-employee Director’s Restricted Stock Unit account shall, to the extent vested, be settled in a lump sum by the issuance of an equal number of shares of Stock, rounded down to the nearest whole share, upon the earliest of (i) the first anniversary of the Grant Date (the normal settlement date), (ii) the Non-employee Director’s death, (iii) the Non-employee Director’s Disability (within the meaning of Section 409A of the Code), or (iv) the Non-employee Director’s Separation from Service following a Change in Control. However, a Non-employee Director may irrevocably elect, no later than December 31 of the calendar year prior to the Grant Date of the Restricted Stock Units (or such later time permitted by Section 409A) to have the Non-employee Director’s Restricted Stock Unit account settled in (1) a series of 10 approximately equal annual installments (which shall be separate payments for purposes of Section 409A) commencing in January of any year following the normal settlement date, or (2) a lump sum in January of any future year following the normal settlement date. In the event that the Non-employee Director elects settlement of the Restricted Stock Units in accordance with the immediately preceding sentence, the Restricted Stock Units shall be earlier settled in a lump sum, to the extent vested, upon the occurrence of any of the events set forth in Section 7.1(c)(ii) through 7.1(c)(iv) prior to the elected settlement date (or commencement thereof in the case of settlement in 10 equal annual installments). In the event that a Non-employee Director elects to have the Non-employee Director’s Restricted Stock |
2021 Joint Proxy Statement | A-11 |
Unit account settled in a series of 10 approximately equal annual installments commencing in January of any year following the normal settlement date and one of the events set forth in Section 7.1(c) (ii) through 7.1(c)(iv) occurs after commencement of such installments but prior to full settlement of the Non-employee Director’s Restricted Stock Units, then any remaining unsettled Restricted Stock Units will be settled in a lump sum upon the occurrence of the applicable event but only to the extent that such acceleration would not result in the imposition of taxation under Section 409A. The Board may authorize other deferral alternatives with respect to Restricted Stock Units granted to Non-employee Directors, provided that such deferral alternatives comply with the deferral timing and other requirements of Section 409A. Such deferral alternatives may include, without limitation, deferral until the Non-employee Director’s separation from service or until the January following such separation.
| 7.2 | Effect of Termination of Service as a Non-employee Director. |
| (a) | Forfeiture of Award. If the Non-employee Director has a Separation from Service prior to the normal vesting date, all Restricted Stock Units credited to the Participant’s account that have not vested in accordance with Section 7.2(b) or 7.3 shall be forfeited to the Company from and after the date of such Separation from Service, and the Participant shall cease to have any rights with respect thereto; provided, however, that if the Non-employee Director Separates from Service due to a pending Disability determination, such forfeiture shall not occur until a finding that such Disability has not occurred. | | (b) | Death or Disability. If the Non-employee Director becomes “disabled,” within the meaning of Section 409A of the Code or in the event of the Non-employee Director’s death, all Restricted Stock Units credited to the Non-employee Director’s account shall immediately vest and become payable, in accordance with Section 7.1(c), to the Participant (or the Participant’s legal representative or other person who acquired the rights to the Restricted Stock Units by reason of the Participant’s death) in the form of a number of shares of Stock equal to the number of Restricted Stock Units credited to the Restricted Stock Unit account, rounded down to the nearest whole share. | | (c) | Notwithstanding the provisions of Section 7.1(c) above, the Board, in its sole discretion, may amend this Section 7 or establish different terms and conditions pertaining to Non-employee Director Awards, in compliance with Section 409A of the Code. |
| 7.3 | Other Awards to Non-employee Directors. Notwithstanding anything to the contrary set forth in this Plan, subject to Section 5.4(b) of the Plan, Non-employee Directors shall be eligible to receive all types of Awards under the Plan in addition to or instead of Non-employee Director Awards, as may be determined by the Board. |
8. | Terms and Conditions of Stock Appreciation Rights. |
Stock Appreciation Rights shall be evidenced by Award Agreements specifying the number of shares of Stock subject to the Award, in such form as the Committee shall from time to time establish. No SAR or purported SAR shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing SARs may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions.
| 8.1 | Types of SARs Authorized. SARs may be granted in tandem with all or any portion of a related Option (a “Tandem SAR”) or may be granted independently of any Option (a “Freestanding SAR”). A Tandem SAR may be granted either concurrently with the grant of the related Option or at any time thereafter prior to the complete exercise, termination, expiration or cancellation of such related Option. | | 8.2 | Exercise Price. The exercise price for each SAR shall be established in the discretion of the Committee; provided, however, that (other than in connection with Substitute Awards granted in accordance with Code Section 424(a)): (a) the exercise price per share subject to a Tandem SAR shall be the exercise price per share under the related Option and (b) the exercise price per share subject to a Freestanding SAR shall not be less than the Fair Market Value of a share of Stock on the effective date of grant of the SAR. | | 8.3 | Exercisability and Term of SARs. |
| (a) | Tandem SARs.Tandem SARs shall be exercisable only at the time and only to the extent that the related Option is exercisable, subject to such provisions as the Committee may specify where the Tandem SAR is granted with respect to less than the full number of shares of Stock subject to the related Option. |
2021 Joint Proxy Statement | A-12 |
| (b) | Freestanding SARs.Freestanding SARs shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such SAR; provided, however, that no Freestanding SAR shall be exercisable after the expiration of ten (10) years after the effective date of grant of such SAR. | | (c) | Extension if Exercise Prevented by Law. Notwithstanding the foregoing, unless the Committee provides otherwise in the Award Agreement, if the exercise of an SAR within the applicable time periods is prevented by the provisions of Section 15 below, the SAR shall remain exercisable until three (3) months (or such longer period of time as determined by the Committee, in its discretion) after the date the Participant is notified by the Company that the SAR is exercisable, but in any event no later than the earlier of the date of expiration of the SAR’s term (as set forth in the applicable Award Agreement) and the tenth anniversary of the date of grant of the SAR. | | (d) | Extension if Exercise Prohibited by Law. Notwithstanding the foregoing, in the event that on the last business day of the term of an SAR the exercise of the SAR is prohibited by applicable law, the term shall be extended for a period of thirty (30) days following the end of the legal prohibition. |
| 8.4 | Deemed Exercise of SARs. An Award Agreement may provide that if on the last day of the term of an SAR, the Fair Market Value of one share exceeds the grant price per share of the Stock Appreciation Right, and the Participant has not exercised the SAR or the tandem Option (if applicable), and the SAR has not otherwise expired, the SAR, to the extent then vested, shall be deemed to have been exercised by the Participant on such day. In such event, the Company shall make payment to the Participant in accordance with this Section, reduced by the number of shares (or cash) required for withholding taxes; provided, however, any fractional share shall be settled in cash. | | 8.5 | Effect of Termination of Service. Subject to earlier termination of the SAR as otherwise provided herein and unless otherwise provided by the Committee in the grant of an SAR and set forth in the Award Agreement, an SAR shall be exercisable after a Participant’s termination of Service only as provided in the Award Agreement. |
9. | Terms and Conditions of Restricted Stock Awards. |
Restricted Stock Awards shall be evidenced by Award Agreements specifying the number of shares of Stock subject to the Award, in such form as the Committee shall from time to time establish. No Restricted Stock Award or purported Restricted Stock Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Restricted Stock Awards may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions.
| 9.1 | Types of Restricted Stock Awards Authorized. Restricted Stock Awards may or may not require the payment of cash compensation for the stock. Restricted Stock Awards may be granted upon such conditions as the Committee shall determine, including, without limitation, upon the attainment of one or more Performance Goals described in Section 10.4 or other performance conditions established by the Committee. | | 9.2 | Purchase Price. The purchase price, if any, for shares of Stock issuable under each Restricted Stock Award and the means of payment shall be established by the Committee in its discretion. | | 9.3 | Purchase Period. A Restricted Stock Award requiring the payment of cash consideration shall be exercisable within a period established by the Committee; provided, however, that no Restricted Stock Award granted to a prospective Employee, prospective Consultant or prospective Director may become exercisable prior to the date on which such person commences Service. | | 9.4 | Vesting and Restrictions on Transfer. Shares issued pursuant to any Restricted Stock Award may or may not be made subject to Vesting Conditions based upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 10.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such Award. During any Restriction Period in which shares acquired pursuant to a Restricted Stock Award remain subject to Vesting Conditions, such shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of other than as provided in the Award Agreement or as provided in Section 18. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions. |
2021 Joint Proxy Statement | A-13 |
| 9.5 | Voting Rights, Dividends and Distributions. Except as provided in Section 5.5, Section 9.4, this Section, and any Award Agreement, during the Restriction Period applicable to shares subject to a Restricted Stock Award, the Participant shall have all of the rights of a shareholder of the Company holding shares of Stock, including the right to vote such shares and to receive all dividends and other distributions paid with respect to such shares. However, in the event of a dividend or distribution paid in shares of Stock or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.2, any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant is entitled by reason of the Participant’s Restricted Stock Award shall be immediately subject to the same Vesting Conditions as the shares subject to the Restricted Stock Award with respect to which such dividends or distributions were paid or adjustments were made. | | 9.6 | Effect of Termination of Service. Unless otherwise provided by the Committee in the grant of a Restricted Stock Award and set forth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including the Participant’s death or Disability), then the Participant shall forfeit to the Company any shares acquired by the Participant pursuant to a Restricted Stock Award that remain subject to Vesting Conditions as of the date of the Participant’s termination of Service in exchange for the payment of the purchase price, if any, paid by the Participant. The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company. |
10. | Terms and Conditions of Performance Awards. |
Performance Awards shall be evidenced by Award Agreements in such form as the Committee shall from time to time establish. No Performance Award or purported Performance Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Performance Awards may incorporate all or any of the terms of the Plan by reference.
| 10.1 | Types of Performance Awards Authorized. Performance Awards may be in the form of either Performance Shares or Performance Units. Each Award Agreement evidencing a Performance Award shall specify the number of Performance Shares or Performance Units subject thereto, the Performance Award Formula, the Performance Goal(s) and Performance Period applicable to the Award, and the other terms, conditions and restrictions of the Award. | | 10.2 | Initial Value of Performance Shares and Performance Units. Unless otherwise provided by the Committee in granting a Performance Award, each Performance Share shall have an initial value equal to the Fair Market Value of one (1) share of Stock, subject to adjustment as provided in Section 4.2, on the effective date of grant of the Performance Share. Each Performance Unit shall have an initial value determined by the Committee. The final value payable to the Participant in settlement of a Performance Award determined on the basis of the applicable Performance Award Formula will depend on the extent to which Performance Goals established by the Committee are attained within the applicable Performance Period established by the Committee. | | 10.3 | Establishment of Performance Period, Performance Goals and Performance Award Formula. In granting each Performance Award, the Committee shall establish in writing the applicable Performance Period, Performance Award Formula and one or more Performance Goals that, when measured at the end of the Performance Period, shall determine on the basis of the Performance Award Formula the final value of the Performance Award to be paid to the Participant. The Company shall notify each Participant granted a Performance Award of the terms of such Award, including the Performance Period, Performance Goal(s) and Performance Award Formula. | | 10.4 | Measurement of Performance Goals. Performance Goals shall be established by the Committee on the basis of targets to be attained (“Performance Targets”) with respect to one or more measures of business or financial performance (each, a “Performance Measure”), subject to the following. |
| (a) | Performance Measures.Performance Measures shall be calculated with respect to the Company and/ or each Subsidiary Corporation and/or such division or other business unit as may be selected by the Committee, or may be based upon performance relative to performance of other companies or upon comparisons of any of the indicators of performance relative to performance of other companies. Performance Measures may be based upon one or more of the following business criteria, as determined by the Committee: (i) sales revenue; (ii) gross margin; (iii) operating margin; (iv) operating income; (v) pre-tax profit; (vi) earnings before interest, taxes and depreciation and amortization (EBITDA)/ adjusted EBITDA; (vii) net income; (viii) expenses; (ix) the market price of the Stock; (x) earnings per |
2021 Joint Proxy Statement | A-14 |
| | share; (xi) return on shareholder equity or assets; (xii) return on capital; (xiii) return on net assets; (xiv) economic profit or economic value added (EVA); (xv) market share; (xvi) customer satisfaction; (xvii) safety; (xviii) total shareholder return; (xix) earnings; (xx) cash flow; (xxi) revenue; (xxii) profits before interest and taxes; (xxiii) profit/loss; (xxiv) profit margin; (xxv) working capital; (xxvi) price/ earnings ratio; (xxvii) debt or debt-to-equity; (xxviii) accounts receivable; (xxix) write-offs; (xxx) cash; (xxxi) assets; (xxxii) liquidity; (xxxiii) core earnings (xxxiv) operational reliability; (xxxv) environmental performance; (xxxvi) funds from operations; (xxxvii) adjusted revenues; (xxxviii) free cash flow; or (xxxix) operational performance. | | (b) | Performance Targets.Performance Targets may include a minimum, maximum, target level and intermediate levels of performance, with the final value of a Performance Award determined under the applicable Performance Award Formula by the level attained during the applicable Performance Period. A Performance Target may be stated as an absolute value or as a value determined relative to a standard selected by the Committee. |
| 10.5 | Settlement of Performance Awards. |
| (a) | Determination of Final Value.As soon as practicable, but no later than the 15th day of the third month following the completion of the Performance Period applicable to a Performance Award (or such shorter period set forth in an Award Agreement), the Committee shall certify the extent to which the applicable Performance Goals have been attained and the resulting final value of the Award earned by the Participant and to be paid upon its settlement in accordance with the applicable Performance Award Formula no later than the 15th day of the third month following the completion of such Performance Period (or such shorter period set forth in an Award Agreement). | | (b) | Discretionary Adjustment of Award Formula.In its discretion, the Committee may, either at the time it grants a Performance Award or at any time thereafter, provide for the positive or negative adjustment of the Performance Award Formula applicable to a Performance Award to reflect such Participant’s individual performance in his or her position with the Company or such other factors as the Committee may determine. | | (c) | Payment in Settlement of Performance Awards. As soon as practicable following the Committee’s determination and certification in accordance with Sections 10.5(a) and (b) but, in any case, no later than the 15th day of the third month following completion of the Performance Period applicable to a Performance Award (or such shorter period set forth in an Award Agreement), payment shall be made to each eligible Participant (or such Participant’s legal representative or other person who acquired the right to receive such payment by reason of the Participant’s death) of the final value of the Participant’s Performance Award. Payment of such amount shall be made in cash, shares of Stock, or a combination thereof as determined by the Committee. |
| 10.6 | Voting Rights, Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares of Stock represented by Performance Share Awards until the date of the issuance of such shares, if any (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). However, the Committee, in its discretion, may provide in the Award Agreement evidencing any Performance Share Award that the Participant shall be entitled to receive Dividend Equivalents with respect to the payment of cash dividends on Stock having a record date prior to the date on which the Performance Shares are settled or forfeited. Such Dividend Equivalents, if any, shall be credited to the Participant in the form of additional whole Performance Shares as of the date of payment of such cash dividends on Stock. The number of additional Performance Shares (rounded to the nearest whole number) to be so credited shall be determined by dividing (a) the amount of cash dividends paid on such date with respect to the number of shares of Stock represented by the Performance Shares previously credited to the Participant by (b) the Fair Market Value per share of Stock on such date. Dividend Equivalents credited in connection with Performance Shares shall be subject to Section 5.5 of the Plan. Settlement of Dividend Equivalents may be made in cash, shares of Stock, or a combination thereof as determined by the Committee, and may be paid on the same basis as settlement of the related Performance Shares as provided in Section 10.5. Dividend Equivalents shall not be paid with respect to Performance Units. In the event of an adjustment described in Section 4.2, the adjusted Performance Share Award shall be immediately subject to the same Performance Goals as are applicable to the Award. | | 10.7 | Effect of Termination of Service. Unless otherwise provided by the Committee in the grant of a Performance Award and set forth in the Award Agreement, the effect of a Participant’s termination of Service on the Performance Award shall be as follows. |
2021 Joint Proxy Statement | A-15 |
| (a) | Death or Disability.If the Participant’s Service terminates because of the death or Disability of the Participant before the completion of the Performance Period applicable to the Performance Award, the final value of the Participant’s Performance Award shall be determined by the extent to which the applicable Performance Goals have been attained with respect to the entire Performance Period and shall be prorated based on the number of months of the Participant’s Service during the Performance Period. Payment shall be made following the end of the Performance Period in any manner permitted by Section 10.5. | | (b) | Other Termination of Service. If the Participant’s Service terminates for any reason except death or Disability before the completion of the Performance Period applicable to the Performance Award, such Award shall be forfeited in its entirety; provided, however, that in the event of termination of the Participant’s Service for other reasons, the Committee, in its sole discretion, may waive the automatic forfeiture of all or any portion of any such Award. |
11. | Terms and Conditions of Restricted Stock Unit Awards. |
Restricted Stock Unit Awards shall be evidenced by Award Agreements specifying the number of Restricted Stock Units subject to the Award, in such form as the Committee shall from time to time establish. No Restricted Stock Unit Award or purported Restricted Stock Unit Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Restricted Stock Units may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions.
| 11.1 | Grant of Restricted Stock Unit Awards. Restricted Stock Unit Awards may be granted upon such conditions as the Committee shall determine, including, without limitation, upon the attainment of one or more Performance Goals described in Section 10.4. | | 11.2 | Vesting. Restricted Stock Units may or may not be made subject to Vesting Conditions based upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 10.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such Award. | | 11.3 | Voting Rights, Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares of Stock represented by Restricted Stock Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). However, the Committee, in its discretion, may provide in the Award Agreement evidencing any Restricted Stock Unit Award that the Participant shall be entitled to receive Dividend Equivalents with respect to the payment of cash dividends on Stock having a record date prior to the date on which Restricted Stock Units held by such Participant are settled. Such Dividend Equivalents, if any, shall be paid by crediting the Participant with additional whole Restricted Stock Units as of the date of payment of such cash dividends on Stock. The number of additional Restricted Stock Units (rounded to the nearest whole number) to be so credited shall be determined by dividing (a) the amount of cash dividends paid on such date with respect to the number of shares of Stock represented by the Restricted Stock Units previously credited to the Participant by (b) the Fair Market Value per share of Stock on such date. Such additional Restricted Stock Units shall be subject to the same terms and conditions and shall be settled in the same manner and at the same time as the Restricted Stock Units originally subject to the Restricted Stock Unit Award, provided that Dividend Equivalents may be settled in cash, shares of Stock, or a combination thereof as determined by the Committee and set forth in the Award Agreement. In the event of an adjustment as described in Section 4.2, the Participant’s adjusted Restricted Stock Unit Award shall be immediately subject to the same Vesting Conditions as are applicable to the Award. | | 11.4 | Effect of Termination of Service. Unless otherwise provided by the Committee in the grant of a Restricted Stock Unit Award and set forth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including the Participant’s death or Disability), then the Participant shall forfeit to the Company any Restricted Stock Units pursuant to the Award that remain subject to Vesting Conditions as of the date of the Participant’s termination of Service. | | 11.5 | Settlement of Restricted Stock Unit Awards. The Company shall issue to a Participant on the date on which Restricted Stock Units subject to the Participant’s Restricted Stock Unit Award vest or on such other date determined by the Committee, in its discretion, and set forth in the Award Agreement one (1) share of Stock (and/or any other new, substituted or additional securities or other property pursuant to an adjustment described in Section 11.3) for each Restricted Stock Unit then becoming vested or otherwise to be settled |
2021 Joint Proxy Statement | A-16 |
on such date, subject to the withholding of applicable taxes, provided that Restricted Stock Units may be settled in cash, shares of Stock, or a combination thereof as determined by the Committee and set forth in the Award Agreement. Notwithstanding the foregoing, if permitted by the Committee and set forth in the Award Agreement, and subject to the restrictions of Section 409A of the Code, the Participant may elect in accordance with terms specified in the Award Agreement to defer receipt of all or any portion of the shares of Stock or other property otherwise issuable to the Participant pursuant to this Section.
12. | Deferred Compensation Awards. |
| 12.1 | Establishment of Deferred Compensation Award Programs. This Section 12 shall not be effective unless and until the Committee determines to establish a program pursuant to this Section. The Committee, in its discretion and upon such terms and conditions as it may determine, may establish one or more programs pursuant to the Plan under which: |
| (a) | Subject to the restrictions of Section 409A of the Code, Participants designated by the Committee who are Insiders or otherwise among a select group of management or highly compensated Employees may irrevocably elect, prior to a date specified by the Committee, to reduce such Participant’s compensation otherwise payable in cash (subject to any minimum or maximum reductions imposed by the Committee) and to be granted automatically at such time or times as specified by the Committee one or more Awards of Stock Units with respect to such numbers of shares of Stock as determined in accordance with the rules of the program established by the Committee and having such other terms and conditions as established by the Committee; and | | (b) | Subject to the restrictions of Section 409A of the Code, Participants designated by the Committee who are Insiders or otherwise among a select group of management or highly compensated Employees may irrevocably elect, prior to a date specified by the Committee, to be granted automatically an Award of Stock Units with respect to such number of shares of Stock and upon such other terms and conditions as established by the Committee in lieu of cash or shares of Stock otherwise issuable to such Participant upon the settlement of a Performance Award or Performance Unit. |
| 12.2 | Terms and Conditions of Deferred Compensation Awards. Deferred Compensation Awards granted pursuant to this Section 12 shall be evidenced by Award Agreements in such form as the Committee shall from time to time establish. No such Deferred Compensation Award or purported Deferred Compensation Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Deferred Compensation Awards may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions. |
| (a) | Vesting Conditions. Deferred Compensation Awards shall or shall not be subject to vesting conditions, as determined by the Committee. | | (b) | Terms and Conditions of Stock Units. |
| (i) | Voting Rights, Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares of Stock represented by Stock Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). However, the Committee, in its discretion, may provide in the applicable Award Agreement that the Participant shall be entitled to receive Dividend Equivalents with respect to the payment of cash dividends on Stock having a record date prior to the date on which Stock Units held by such Participant are settled. Such Dividend Equivalents shall be paid by crediting the Participant with additional whole and/or fractional Stock Units as of the date of payment of such cash dividends on Stock. The method of determining the number of additional Stock Units to be so credited shall be specified by the Committee and set forth in the Award Agreement. Such additional Stock Units shall be subject to the same terms and conditions and shall be settled in the same manner and at the same time as the Stock Units originally subject to the Stock Unit Award. In the event of a dividend or distribution paid in shares of Stock or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.2, appropriate adjustments shall be made in the Participant’s Stock Unit Award so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant would be entitled by reason of the shares of Stock issuable upon settlement of the Award. |
2021 Joint Proxy Statement | A-17 |
| (ii) | Settlement of Stock Unit Awards. A Participant electing to receive an Award of Stock Units pursuant to this Section 12 shall specify at the time of such election a settlement date with respect to such Award in accordance with rules established by the Committee. Except as otherwise set forth in the applicable Award Agreement, the Company shall issue to the Participant, upon the earlier of the settlement date elected by the Participant or the date of the Participant’s Separation from Service, a number of whole shares of Stock equal to the number of whole Stock Units subject to the Stock Unit Award. The Participant shall not be required to pay any additional consideration (other than applicable tax withholding) to acquire such shares. Any fractional Stock Unit subject to the Stock Unit Award shall be settled by the Company by payment in cash of an amount equal to the Fair Market Value as of the payment date of such fractional share. |
13. | Other Stock-Based Awards. |
In addition to the Awards set forth in Sections 6 through 12 above, the Committee, in its sole discretion, may carry out the purpose of this Plan by awarding Stock-Based Awards as it determines to be in the best interests of the Company and subject to such other terms and conditions as it deems necessary and appropriate. Such awards may be evidenced by Award Agreements in such form as the Committee shall from time to time establish.
| 14.1 | Effect of Change in Control. Except as set forth in an applicable Award Agreement, in the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of any Participant, either assume or continue the Company’s rights and obligations under outstanding Awards or substitute for such Awards substantially equivalent Awards covering the Acquiror’s stock. Except as set forth in an applicable Award Agreement, Awards that are assumed or continued in connection with a Change in Control shall be subject to such additional accelerated vesting and/or exercisability, or lapse of restrictions in connection with the Participant’s termination of Service in connection with the Change in Control as the Committee or Board may determine, if any. Except as set forth in an applicable Award Agreement, in the event of a Change in Control in which Awards are not assumed or continued, a Participant’s then-outstanding Awards that are not vested shall immediately vest, and all performance conditions associated with Performance Awards shall be deemed satisfied as if target performance was achieved, and shall be settled in cash, shares or a combination thereof, as determined by the Committee, within thirty (30) days following such Change in Control (except to the extent that settlement of the Award must be made pursuant to its original schedule in order to comply with Code Section 409A), notwithstanding that the applicable performance period, retention period or other restrictions and conditions have not been completed or satisfied. |
15. | Compliance with Securities Law. |
The grant of Awards and the issuance of shares of Stock pursuant to any Award shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, no Award may be exercised or shares issued pursuant to an Award unless (a) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares issuable pursuant to the Award or (b) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to issuance of any Stock, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company.
2021 Joint Proxy Statement | A-18 |
| 16.1 | Tax Withholding in General. The Company shall have the right to deduct from any and all payments made under the Plan, or to require the Participant, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise or Net Exercise of an Option, to make adequate provision for the federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to an Award or the shares acquired pursuant thereto. The Company shall have no obligation to deliver shares of Stock, to release shares of Stock from an escrow established pursuant to an Award Agreement, or to make any payment in cash under the Plan unless the Participating Company Group’s tax withholding obligations have been satisfied by the Participant. | | 16.2 | Withholding in Shares. The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable to a Participant upon the exercise or settlement of an Award, or to accept from the Participant the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of the Participating Company Group. Notwithstanding the foregoing, the Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates to the extent required to avoid adverse accounting or other consequences to the Company or the Participant. |
17. | Amendment or Termination of Plan. |
The Board or the Committee may amend, suspend or terminate the Plan at any time. However, without the approval of the Company’s shareholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of Section 4.2), (b) no change in the class of persons eligible to receive Incentive Stock Options, (c) no amendment to Section 5.4(b), and (d) no other amendment of the Plan that would require approval of the Company’s shareholders under any applicable law, regulation or rule. Notwithstanding the foregoing, only the Board may amend Section 7 and may do so without the approval of the Company’s shareholders. No amendment, suspension or termination of the Plan shall affect any then outstanding Award unless expressly provided by the Board or the Committee. In any event, no amendment, suspension or termination of the Plan may adversely affect any then outstanding Award without the consent of the Participant unless necessary to comply with any applicable law, regulation or rule.
18. | Miscellaneous Provisions. |
| 18.1 | Repurchase Rights. Shares issued under the Plan may be subject to one or more repurchase options, or other conditions and restrictions as determined by the Committee in its discretion at the time the Award is granted. The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder, and shall promptly present to the Company any and all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions. | | 18.2 | Provision of Information. Each Participant shall be given access to information concerning the Company equivalent to that information generally made available to the Company’s common shareholders. | | 18.3 | Rights as Employee, Consultant or Director. No person, even though eligible pursuant to Section 5, shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. Nothing in the Plan or any Award granted under the Plan shall confer on any Participant a right to remain an Employee, Consultant or Director or interfere with or limit in any way any right of a Participating Company to terminate the Participant’s Service at any time. To the extent that an Employee of a Participating Company other than the Company receives an Award under the Plan, that Award shall in no event be understood or interpreted to mean that the Company is the Employee’s employer or that the Employee has an employment relationship with the Company. A Participant’s rights, if any, in respect of or in connection with any Award are derived solely from the discretionary decision of the Company to permit the individual to participate in the Plan and to benefit from a discretionary Award. By accepting an Award under the Plan, a Participant expressly acknowledges that there is no obligation on the part of the Company to continue the Plan and/or grant any additional Awards. Any Award granted hereunder is not intended to be compensation of a continuing or recurring nature, or part of a Participant’s normal |
2021 Joint Proxy Statement | A-19 |
| | or expected compensation, and in no way represents any portion of a Participant’s salary, compensation, or other remuneration for purposes of pension benefits, severance, redundancy, resignation or any other purpose. The Company and its Parent Corporations and Subsidiary Corporations and Affiliates reserve the right to terminate the Service of any person at any time, and for any reason, subject to applicable laws and such person’s written employee agreement (if any), and such terminated person shall be deemed irrevocably to have waived any claim to damages or specific performance for breach of contract or dismissal, compensation for loss of office, tort or otherwise with respect to the Plan or any outstanding Award that is forfeited and/or is terminated by its terms or to any future Award. | | 18.4 | Rights as a Shareholder. A Participant shall have no rights as a shareholder with respect to any shares covered by an Award until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in another provision of the Plan. | | 18.5 | Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise or settlement of any Award. | | 18.6 | Severability. If any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or unenforceable in any respect, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impaired thereby. | | 18.7 | Unfunded Obligation. Participants shall have the status of general unsecured creditors of the Company. Any amounts payable to Participants pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974. No Participating Company shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, that the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Committee or any Participating Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant’s creditors in any assets of any Participating Company. The Participants shall have no claim against any Participating Company for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan. Each Participating Company shall be responsible for making benefit payments pursuant to the Plan on behalf of its Participants or for reimbursing the Company for the cost of such payments, as determined by the Company in its sole discretion. In the event the respective Participating Company fails to make such payment or reimbursement, a Participant’s (or other individual’s) sole recourse shall be against the respective Participating Company, and not against the Company. A Participant’s acceptance of an Award pursuant to the Plan shall constitute agreement with this provision. | | 18.8 | Choice of Law. Except to the extent governed by applicable federal law, the validity, interpretation, construction and performance of the Plan and each Award Agreement shall be governed by the laws of the State of California, without regard to its conflict of law rules. | | 18.9 | Section 409A of the Code. Notwithstanding anything to the contrary in the Plan, to the extent (i) any Award payable in connection with a Participant’s Separation from Service constitutes deferred compensation subject to (and not exempt from) Section 409A of the Code and (ii) the Participant is deemed at the time of such separation to be a “specified employee” under Section 409A of the Code and the Treasury regulations thereunder, then payment shall not be made or commence until the earlier of (i) six (6) months after such Separation from Service or (ii) the date of the Participant’s death following such Separation from Service; provided, however, that such delay shall only be effected to the extent required to avoid adverse tax treatment to the Participant, including (without limitation) the additional twenty percent (20%) tax for which the Participant would otherwise be liable under Section 409A(a)(1)(B) of the Code in the absence of such delay. Upon the expiration of the applicable delay period, any payment that would have otherwise been paid during that period (whether in a single sum or in installments) in the absence of this paragraph shall be paid to the Participant or the Participant’s beneficiary in one lump sum on the first business day immediately following such delay and any undelayed payments will be paid in accordance with their normal terms. Each Award is intended to comply with or be exempt from the provisions of Section 409A of the Code and shall be interpreted in a manner consistent therewith. The Committee may in its sole discretion (but without any obligation to do so) amend the terms of any Award to the extent it |
2021 Joint Proxy Statement | A-20 |
| | determines necessary to comply with Section 409A of the Code. Each payment under this Plan is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury regulations. In no event will a Participating Company have any obligation or liability under the terms of this Plan to reimburse, indemnify, or hold harmless any Participant or any other person in respect of Awards, for any taxes, interest or penalties imposed, or other costs incurred, as a result of Section 409A of the Code. | | 18.10 | Restrictions on Transfer. No Award and no shares of Stock that have not been issued or as to which any applicable restriction, performance or deferral period has not lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of decent and distribution, and such Awards may be exercised during the life of the Participant only by the Participant or the Participant’s guardian or legal representative. Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion, and set forth in the applicable Award Agreement, an Award shall be assignable or transferrable to a “family member” or other permitted transferee to the extent covered under a Form S-8 Registration Statement under the Securities Act. |
2021 Joint Proxy Statement | A-21 |
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