(San Francisco) – PG&E Corporation (NYSE:PCG) today announced that, beginning in 2010, it will seek shareholders’ advisory vote on executive compensation each year at the company’s annual meeting. In addition, PG&E Corporation’s utility unit, Pacific Gas and Electric Company, has adopted the same policy. These advisory votes will be taken into consideration by the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company as they set future executive compensation policies and levels.
“Extending an opportunity for shareholders to weigh in on our compensation policies and procedures is the right thing to do and will be a source of valuable input,” said Peter A. Darbee, PG&E Corporation Chairman, CEO and President. “PG&E’s compensation programs are designed to ensure that pay matches performance and to align the interests of executives and investors. Asking for shareholders’ input is good governance and an important way to hold ourselves accountable for meeting these goals. It’s also consistent with our vision to be the nation’s leading utility.”
The Boards' decision to adopt the new policy came in response to a majority vote at PG&E Corporation’s 2008 annual meeting in favor of a shareholder proposal to establish a “say on pay” advisory vote. That proposal was supported by 52.7 percent of shareholders who voted on the measure.
As a result, next year PG&E Corporation and Pacific Gas and Electric Company will begin seeking shareholder approval of the companies’ overall pay-for-performance compensation policies and practices, as described in detail each year in the proxy statement. The companies will ask shareholders to review the “Compensation Discussion and Analysis” in the proxy statement, as well as the specific information reported in the compensation tables and related disclosures for listed officers.
The adoption of the “say on pay” policy in response to last year’s vote is the fourth time in recent years that PG&E Corporation acted on a shareholder proposal that received a majority vote. In 2006, the company adopted a shareholder recommendation to establish a policy restricting so-called “golden parachutes.” In 2004, the company adopted a shareholder recommendation to eliminate its shareholder rights plan as well as a shareholder recommendation to adopt a policy regarding future shareholder rights plans.
PG&E Corporation’s performance on corporate governance issues has earned strong ratings from key evaluators of corporate governance. PG&E recently received Corporate Governance Quotient scores from RiskMetrics Group/Institutional Shareholder Services (ISS) that were higher than those of 92.8 percent of the utility companies in the S&P 500 index and 86.7 percent of all S&P 500 companies. GovernanceMetrics International awarded PG&E an overall governance rating of 9.5 out of a possible 10.