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WEIL, GOTSHAL & MANGES LLP

Stephen Karotkin (pro hac vice)

(stephen.karotkin@weil.com)

Ray C. Schrock, P.C. (pro hac vice)

(ray.schrock@weil.com)

Jessica Liou (pro hac vice)

(jessica.liou@weil.com) 

Matthew Goren (pro hac vice)

(matthew.goren@weil.com)

767 Fifth Avenue

New York, NY 10153-0119

Tel: 212 310 8000

Fax: 212 310 8007

KELLER & BENVENUTTI LLP

Tobias S. Keller (#151445)

(tkeller@kellerbenvenutti.com)

Jane Kim (#298192)

(jkim@kellerbenvenutti.com)

650 California Street, Suite 1900

San Francisco, CA 94108

Tel: 415 496 6723

Fax: 650 636 9251

Attorneys for Debtors

and Debtors in Possession

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION

In re:

PG&E CORPORATION,

- and -

PACIFIC GAS AND ELECTRIC 

COMPANY,

Debtors. 

Bankruptcy Case 

No. 19-30088 (DM) Chapter 11

(Lead Case)(Jointly Administered) 

DECLARATION OF LANE T. RINGLEE IN 

SUPPORT OF MOTION OF DEBTORS 

PURSUANT TO 11 U.S.C. §§ 363 AND 105(a) 

FOR AN ORDER APPROVING TERMS OF 

EMPLOYMENT FOR NEW CHIEF 

EXECUTIVE OFFICER AND PRESIDENT OF 

PACIFIC GAS AND ELECTRIC COMPANY

Date: October 22, 2019

Time: 10:00 a.m. (Pacific Time)

Place: United States Bankruptcy Court

Courtroom 17, 16th Floor

San Francisco, CA 94102

☐Affects PG&E Corporation 

☒Affects Pacific Gas and Electric Company 

☐Affects both Debtors

* All papers shall be filed in the Lead Case, 

No. 19-30088 (DM).

Case: 19-30088 Doc# 4061 Filed: 10/01/19 Entered: 10/01/19 19:16:10 Page 1 of

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I, Lane T. Ringlee, pursuant to section 1746 of title 28 of the United States Code, hereby 

declare under penalty of perjury that the following is true and correct to the best of my knowledge, 

information, and belief:

I am a Managing Partner at Pay Governance LLC (“PG”). PG has been retained by PG&E 

Corp. (together with Pacific Gas and Electric Company, “PG&E” or the “Debtors”) to provide 

compensation consulting services to the Debtors. I am familiar with the Debtors’ employment 

compensation practices as described in the Motion of Debtors Pursuant to 11 U.S.C. §§ 363 and 

105(a) for an Order Approving Terms of Employment for New Chief Executive Officer and President 

of Pacific Gas and Electric Company (the “Motion”) filed contemporaneously herewith. I submit this 

Declaration (the “Declaration”) in support of the Motion.1

 

The statements in this Declaration are, except where specifically noted, based on my personal 

knowledge or opinion, on information that I have from the Debtors’ books and records, the Debtors’

employees, the Debtors’ advisors and their employees, or from other members of the PG team working 

under my supervision or direction. I have overseen a compensation consulting team since September 

2014 that has provided various executive and board compensation consulting services to the Debtors.

For the reasons described below, it is my opinion that Mr. Vesey’s proposed compensation 

arrangement is reasonable and consistent with market practice. I am not being specifically 

compensated for this testimony other than through payments received by PG as a professional in the 

ordinary course. I am over the age of 18 years and authorized to submit this Declaration on behalf of 

the Debtors. If I were called upon to testify, I could and would competently testify to the facts set forth 

herein.

I. Background and Qualifications

I received my B.S. degree from the University of California, Berkeley and M.B.A from Cornell 

University. Prior to joining Pay Governance LLC, I held regional management positions with the 

executive compensation practices of Towers Perrin and Towers Watson.

PG is an international professional services firm that provides a wide range of executive 

 1 Capitalized terms used but not otherwise herein defined shall have the meanings ascribed to such 

terms in the Motion.

Case: 19-30088 Doc# 4061 Filed: 10/01/19 Entered: 10/01/19 19:16:10 Page 2 of

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compensation consulting services to hundreds of clients, including expert analysis of executive and 

management compensation. PG’s national team has expertise in accounting, tax, equity/long term 

incentive valuation, and supplemental retirement plans, as well as in advising on proxy statement

modeling and policies.

My responsibilities at PG primarily involve advising clients on the design and implementation 

of executive compensation programs, as well as incentive plans and rewards strategies. I have

extensive experience in managing compensation assignments for major corporations. Some of these 

engagements include, among other things, developing and implementing total compensation strategies, 

advising boards and senior management on the design and structure of executive and board 

compensation programs, and selecting performance criteria and calibrating performance levels for 

incentive plans. Furthermore, I frequently work with boards and top management teams of globally 

prominent organizations across various industry segments on various compensation related matters.

II. PG’s Involvement with the Debtors

Since PG was retained by the Debtors on March 21, 2019, my team and I have familiarized 

ourselves with the Debtors’ executive and Board compensation practices. PG has prepared for and 

attended Compensation Committee meetings of the Board of PG&E Corp., assisted with compensation 

benchmarking, and prepared reports summarizing PG’s conclusions and recommendations. At the start 

of our engagement, PG discussed with the Debtors and their advisors the Debtors’ past financial 

performance and their historical pay practices relating to senior management.

I have assisted the Debtors with benchmarking executive and board of directors compensation, 

designing short- and long-term incentive plans, understanding executive compensation trends at the 

largest investor-owned utilities, developing pay recommendations for promoted and newly-hired 

executives, and structuring executive compensation policies and plans such as stock ownership 

requirements and claw-back policies.

III. Mr. Vesey’s Terms of Employment

Pursuant to the Motion, the Debtors seek approval of Mr. Vesey’s employment terms. The 

following is a summary of the material economic terms of Mr. Vesey’s current proposed 

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compensation:

Category Description

Base Salary • Annualized base salary of $1 million.

Transition Payment • One-time cash transition payment of $1 million.

2

2019 Equity Incentive 

Awards 

• Equity awards will consist of (i) time-based restricted stock units 

(“RSUs”) and (ii) performance-based restricted stock units 

(“PRSUs”). 3

• RSUs and PRSUs. Equity awards with a target annual value of $2 

million, which amount will be prorated based upon the five-month 

period Mr. Vesey will be employed at the Utility in 2019 and 

equals approximately $830,000. 25% of such award will consist 

of RSUs that are not performance-based and 75% of such award 

will consist of PRSUs that are performance-based. The awards 

will be granted as soon as practicable after the Court’s entry of an 

Order approving this Motion.4

• The award of RSUs will vest in three equal installments on each 

of the first three anniversaries of the date of the grant.

• The award of PRSUs will be subject to the 2019 performance- based vesting metrics (the “2019 Performance Metrics”) 

described below. The PRSUs will have a performance period 

beginning on July 1, 2019 and ending on December 31, 2019. 

Anti-Dilution • All equity incentive compensation will be subject to anti-dilution 

provisions upon a spin-off to shareholders and in connection with 

a rights offering to shareholders or other transactions in which 

shareholders are subject to the same anti-dilution protections as 

Mr. Vesey.

Severance5 • Mr. Vesey will be entitled to the general severance benefits 

available to executive officers through the Officer Severance 

Policy. 

• Upon termination by the Utility (other than for “Cause”), Mr. 

Vesey may be eligible for cash severance payments and other 

post-employment benefits. The Officer Severance Policy provides 

 2 Subject to claw-back and repayment in the event Mr. Vesey resigns or is terminated for “Cause”

within 12 months of his start date or August 19, 2020. “Cause” is defined in the PG&E Corp. 2012 

Officer Severance Policy, under which the Utility is a participating employer (the “Officer Severance 

Policy”). 3 The initial award of RSUs and PRSUs will be based on the average closing price of PG&E Corp. 

common stock for the 15 consecutive trading days immediately preceding his start date of August 19, 

2019. 

4 If the grant date of an equity award would occur during a “trading blackout” period, as defined under 

the Debtors’ Insider Trading Policy, then the grant date shall be the first business day after the trading 

blackout ends.

5 If Mr. Vesey is terminated by the Utility for “Cause” (e.g., for dishonesty, a criminal offense, or 

violation of a work rule) or resigns before becoming retirement-eligible, all unvested PRSUs and RSUs 

will be forfeited for no consideration.

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for the following, unless otherwise set forth in the applicable 

award agreements:

o Cash severance of one year’s salary 

o Continued vesting of unvested PRSUs and RSUs for one 

year

o Limited COBRA benefits and outplacement services

• Mr. Vesey has been made aware and has agreed that any 

Severance payment due and payable to him during the pendency 

of these Chapter 11 Cases will only be paid in accordance with 

section 503(c)(2) of the Bankruptcy Code. 

Other Customary Benefits • Annual Perquisite Allowance: Consistent with the Utility’s 

customary historical practice for senior executives, Mr. Vesey will 

receive an annual cash allowance of $25,000. For the 2019 year, 

Mr. Vesey received a reduced allowance of $12,500 to reflect the 

partial year period of his employment. 

• Relocation Cost Reimbursement: Consistent with the Utility’s 

standard Relocation Assistance Program for Officers, Mr. Vesey 

received a one-time cash payment of $7,000 to reimburse for 

expenses incurred in connection with his move to California.

In assessing the reasonableness of Mr. Vesey’s compensation, PG conducted two separate 

benchmarking analyses to evaluate Mr. Vesey’s proposed annual compensation (exclusive of the onetime Transition Payment). First, PG evaluated the compensation of 41 executives serving in the 

comparable position of Chief Operating Officer (“COO”) within the energy industry based on survey 

data from Willis Towers Watson’s 2018 Energy Services Survey and size-adjusted the salary data 

using a regression analysis to align peer energy companies’ revenues with that of the Debtors’. My 

team and I benchmarked COO positions for two reasons: (i) to align with the Utility’s historical 

benchmarking practice for Mr. Vesey’s position, which has historically been a COO role, and (ii) to 

access a larger pool of available data for analysis among peer companies, which will more commonly

employ a COO rather than a utility CEO in addition to a parent CEO. Based on our analysis, my team 

and I determined Mr. Vesey’s total annual compensation (exclusive of the one-time Transition 

Payment) falls below the median total direct compensation of COO’s in the energy industry of 

$3,845,000. Second, my team and I evaluated the publicly available compensation data of utility 

CEO’s at peer utility companies.6 In doing so, my team and I determined Mr. Vesey’s total annual 

 6 The peer companies include: Exelon Corp., NextEra Energy, Inc., FirstEnergy Corp., Southern 

California Edison Co., and Entergy Corp. 

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compensation falls below the median total direct compensation of utility CEOs of $3,373,400. 

Furthermore, four of the five comparable utility CEOs included in the benchmarking were recently 

promoted to the CEO position in the past three years, and do not have the same depth of experience in 

the utility industry as Mr. Vesey. Accordingly, compensation for these utility CEOs, if adjusted for 

increased experience would likely be higher than the current levels, resulting in a higher median total 

direct compensation figure as a benchmark against Mr. Vesey’s total annual compensation. 

Separately, my team and I also analyzed new hire compensation arrangements at large energy 

companies and general industry companies with annual revenues between $9 billion and $30 billion to 

determine the reasonableness of the proposed Transition Payment. PG found that one-time transition 

payments typically amount to over 250% of base pay, which is significantly higher than Mr. Vesey’s 

Transition Payment. Although one-time transition payments are commonly awarded in equity, my 

team and I concluded paying Mr. Vesey’s proposed Transition Payment in cash is reasonable given 

that it is on the low-end of the competitive range and is not intended to replace any forfeited equity 

awards from a previous employer. Furthermore, Mr. Vesey’s compensation arrangement already 

heavily focuses on performance through the inclusion of the 2019 Performance-Based Awards. The 

2019 Performance-Based Awards align Mr. Vesey’s goals and performance with those of the Debtors 

and provide Mr. Vesey with the opportunity to earn a market rate of compensation, but only if certain 

performance goals are achieved.

IV. Conclusion

Based on my experience and the benchmarking work my team and I have performed in these 

cases, I believe that Mr. Vesey’s compensation arrangement is reasonable in light of competitive 

market practice for other companies and comports with industry standards.

Case: 19-30088 Doc# 4061 Filed: 10/01/19 Entered: 10/01/19 19:16:10 Page 6 of

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1 Pursuant to section 1746 of title 28 of the United States Code, I declare under the penalty 

2 of perjury that the foregoing is true and correct. 

3 

4 Dated: October 1, 2019 

5 Moraga, California

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Lani T. Ringlee, Managing Partner 

Paf Governance 

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