The state law that protected southern California Edison and other public service services for forest fires caused by their team came with a capture: the main executives of public services would be forced to take a salary cut if their company’s record was extended.
Edison’s Security Registry decreased last year. The number of fires caused by his team rose to 178, from 90 the previous year and 39% above the average of five years.
The serious injuries suffered by employees increased 56% instead of the average. Five contractors who work in their electrical system died.
As a result of this performance, the company’s parent company, Edison International, reduced the executive bonds granted by 2024, told California’s regulators a report on April 1.
For Edison’s international employees, planned executive bonds were reduced by 5%, and executives in South California Edison saw their bonds reduced by 3%, said Sergey Trakhtenberg, a compensation specialist for the company.
But cash bonds for four of Edison Rose Rose executives last year, according to 17%, according to a March report separately from Edison to federal regulators. His long -term bonds of actions and options, which are much more valuable and not linked to security, also increased.
Of the five main executives, only Pedro Pizarro, executive director of Edison International, saw his decrease in cash bonus. He recovered a cash bonus or 128% of his salary instead of 135% planned due to security failures, the company said, for total compensation, including the salary of $ 13.8 million.
Cash bonds increased for the other four main executives despite security -related deductions because they served in other responsibilities, said Trakhtenberg, director of Total Edison rewards. He said the bonuses would have a higher leg, not for safety -related reductions.
“Compensation is structured to promote security,” Trakhtenberg said, describing it as “the main approach of the company.”
Consumer defenders say that de facto bonds were embedded despite the decrease in security highlights a defect in AB 1054, the 2019 law that reduced the responsibility of the utility colleagues for profit as Edison for damaging forest fires lit by their team.
AB 1054 created a forest fire fund to pay fire damage in an effort to ensure that public services are insolvent by having to withstand billions of dollars in damage costs.
In return, legislation said that executive bonus plans for public services must be “structured to promote security as a priority and to guarantee public safety and financial stability of public services.”
“All these supposed measures of responsibility that were put in the bill are resulting without teeth,” said Mark Toney, executive director of the Public Services Reform Network, a consumer defense group in San Francisco.
“If executives do not feel a significant reduction in salary when there is a significant increase in forest fire safety incidents,” Toney said, “then the incentive is gone.”
One of the executives who received an increase in the cash bonus was Adam Umanoff, Edison’s general advisor.
Umanoff was expected to obtain 85% of its salary of $ 706,000, or $ 600,000, as a cash bonus as its objective at the beginning of the year. The deduction for security failures reduced that bonus, said Trakhtenberg. But the performance of Umanoff in other objectives “was significant above the objective” and, therefore, increased its cash bonus to 101% of its salary,
Then, despite the security failures, Umanoff received a cash bonus of $ 717000, or 19% higher than expected to reorganize.
“If you can invent it elsewhere,” Toney said, “the incentive is gone.”
The public services company recently told its investors that AB 1054 will protect it from possible responsibilities of billions of dollars if it is discovered that its team has caused Eaton’s fire on January 7, resulting in 18 deaths and the destruction of thousands of households and commercial buildings.
The cause of the fire, which is captured videos that are lit under one of Edison’s transmission towers, is still under investigation. Pizarro has said that the restoration of an inactive transmission line is now A main theory Or what caused the mortal fire.
The 2019 LEGILATION was approved in a week to reinforce the financial health of the state for the state’s profittestrime after the camp fire in Butte County, which was caused by a Pacific gas and electricity transmission line.
The forest fire destroyed the city of Paradise and killed 85 people, and the damages helped pg & e bankruptcy.
In the invoice signature ceremony, Governor Gavin Newsom promoted His language that said that public services could not access money in a new State Forest Fire Fund and limit their liabilities from a fire based by their team unless they link executive compensation with their security performance.
In April, Edison presented its mandatory report of annual security performance metrics before the Public Services Commission, since it seeks the approval of raising customer electrical rates by more than 10% this year.
In the report, Edison said that because their security record worsens in certain key metrics, their executives touch “a total deduction of 18 points” on a 100 -point scale used to determine the bonuses.
“Security and compliance are fundamental to the SCE, and events such as employees’ deaths or serious injuries to the public can lead to significant deduction or total elimination” or compensation for executive incentives, written the company.
Edison did not explain in the report what a 18 -point deduction meant for executives in terms of real dollars, another point of frustration with the defenders of the Trypine consumer if the executive compensation plans really comply with 1054.
“Without seeing dollar figures, it is impossible to determine whether the incentive compensation plan of a public service company is reasonable,” the Public Advice Office of the Public Services Commission of the State written in a 2022 letter to forest fire safety regulators.
To try to determine how much lost security objectives really unthink Edison executives last year, the Times analyzed a federal separate securities report that Edison presented to investors known as the declaration of power.
In that March report, Edison detailed how most of his compensation to executives is based on their profits and appreciation of the price of the shares, and not on security.
Security helps determine approximately 50% of cash bonds paid to executives each year, according to the report. But more valuable are long -term incentive bonds, which are paid on actions and options on actions and are based on profits.
The Public Services Reform Network, which is also known as Turn, pointed out these shares bonds in a 2021 letter to regulators where he questioned whether Edison and the other two large public for profit were an executive compensation in security.
“The good financial performance does not necessarily mean that the utility prioritizes security,” Turn staff wrote in the letter.
Trakhtenberg did not agree, saying that “long -term incentives focus on the financial stability of the promotion.” A key part of that is the capacity of the company “in the long term to offer a revarious and affordable power,” he said.
Trakhtenberg pointed out that the State Energy Infrastructure Security Office had approved the company’s executive compensation plan in October, saying it with the requirements of AB 1054, as well as since the agency was established in July 2021.
The Times asked the energy security office if he audited the compensation reports of public services or tried to determine how much money the Edison executives lost due to security failures.
Sandy Cooney, agency spokesman, said the office did not have “legal authority … to audit executive compensation structures.” He sent Edison to the journalist to obtain information on much executive compensation that had decreased in amounts in dollars due to the lost security objectives.
A committee of members of the Edison Board determines what objectives will be linked to security, said Trakhtenberg, and if those objectives have bone.
They even thought that five contractors died last year while working in Edison’s electrical system, the Committee did not include the safety of contractors as an objective, coordinate the company’s documents.
And the committee said the company with its objective of protecting the public despite the fact that three people died of their team and there was a 27% increase in deaths and serious injuries among the public compared to the average of five years.
Trakhtenberg said that most serious injuries occurred to people who committed robbery or vandalism, so the committee said the goal.
Edison has told regulators that if his team begins a catastrophic forest fire, the committee could decide to eliminate cash bonuses from executives.
But the company’s documents show that it has not eliminated or reduced the bonuses for Fairview 2022 in Riverside County, which killed two people, destroyed 22 houses and burned 28,000 acres.
In 2023, the researchers blamed the Edison team for turning on the fire, saying that one of their drivers came into contact with a telecommunications cable, creating sparks that fell into vegetation.
Trakhtenberg said the Board Compensation Committee reviewed the circumstances of the fire that year and discovered that the company had acted “prudence” by clarifying its team. The committee decided not to reduce executive bonuses for the fire, he said.
In March, public services commissioned Edison $ 2.2 million for the fire, saying that he had violated four security regulations, even for not cooperation with researchers.
Trakhtenberg said the compensation committee would reconsider his decision not to penalize executives for the mortal fire at his next meeting.
Turn has repeatedly asked regulators who do not approach Edison’s compensation plans, detailing how his committee has “undue discretion” when establishing objectives and then determining if they have bone.
But the Energy Security Office has approved the plans anyway. Toney said that he believes that the responsibility of reviewing compensation and forest fire plans for public services should be transferred to the Public Services Commission, which had done the work until 2021.
The energy security office has rules that make the review process less transparent than in the commission, he said.
“The whole process, we believe it is manipulated in favor of public services,” he said.
