The appointment of legacy fossil-fuel guy Bill Johnson as PG&E’s new chief executive draws praise from the investor community, but does not inspire the confidence of lawmakers and watchdog groups.
Often in the culture of corporate makeovers, a fresh-faced new executive is appointed, frequently a woman, a person of color, or someone with an exciting alternative background indicating a bold a new path for a beleaguered company. Bankrupt and lawsuit-plagued utility PG&E seems to be embracing the complete opposite of that strategy, as the New York Times reports that the company named coal and natural gas industry executive Bill Johnson as its new CEO, along with naming 10 new directors to its board. Johnson was previously CEO of fossil fuel corporation Progress Energy and the Tennessee Valley Authority.
Johnson replaces three-month interim CEO John Simon, himself a short-term replacement for former CEO Geisha Williams, who left the company right before they declared bankruptcy in January. The Chronicle reports that PG&E faces more than $30 billion in liabilities for their various mishaps that caused or worsened California wildfires in recent years, and the troubled ship that Johnson takes over likely faces more of the same as the state’s wildfire gets tragically longer each year.
Gov. Gavin Newsom, who blasted PG&E’s proposed board overhaul last week as merely “hedge fund financiers, out-of-state executives and others with little or no experience in California,” was similarly unimpressed with PG&E’s unapologetically status quo new appointments.
“Time and again, PG&E has broken the public trust and its responsibilities to ratepayers, wildfire victims and employees,” Newsom’s spokesperson Nathan Click said in a statement to the Times. “While changes were made in the last few days to augment the safety and government expertise on the board, this proposed board still raises concerns — particularly the large representation of Wall Street interests and most board nominees’ lack of relevant California experience.”
The Chronicle describes more of a mixed bag of reactions to Johnson’s hire. An analyst for one of the aforementioned hedge funds called Johnson a “safe choice” who’s “got the credibility and the track record,” while San Mateo state senator Jerry Hill characterized Johnson and his proposed board as dedicated to “financial return and profits rather than a cultural shift to safety."
The election of the proposed new PG&E board, on which Bill Johnson would also sit, is not a done deal. The utility’s shareholders will vote on whether to approve the new 14-person slate (including three existing board members) at a May 21 shareholders meeting. That’s more than six weeks from now, and it’s a fair bet given recent history that another embarrassing revelation or huge financial setback will befall PG&E before then and affect the shareholders’ decision-making.