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767 Fifth Avenue

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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 

BOARD OF DIRECTOR COMPENSATION

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# 4058 Filed: 10/01/19 Entered: 10/01/19 18:37:34 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 pre- and post-petition 

structure of the Debtors’ current and past compensation of non-employee directors serving on the 

respective Boards of Directors (together, the “Boards” and each, a “Board”) of PG&E Corp. and the 

Utility as described in Motion of Debtors Pursuant to 11 U.S.C. §§ 363 and 105(a) for an Order 

Approving Terms of Board of Director Compensation (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 the Postpetition Board Compensation is 

reasonable and generally consistent with applicable market practice for comparable utility companies 

as well as similarly-sized companies. 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 

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

terms in the Motion.

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executive compensation practices of Towers Perrin and Towers Watson.

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

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 Boards’ historical pay 

practices and past levels of engagement. 

III. The Postpetition Board Compensation 

Pursuant to the Motion, the Debtors seek approval of the Postpetition Board Compensation that 

essentially maintains the same economic terms of director compensation as in effect prepetition, but 

provides that the equity component will be in shares of reorganized PG&E Corp. issued at plan value 

rather than existing PG&E Corp. shares. The grant of the equity component will be made following 

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Court approval;2 however, the actual delivery of the shares will not be made until the effective date of 

a chapter 11 plan in these cases. The award will vest upon the latter of emergence and June 22, 2020, 

the first business day after the one-year anniversary of the PG&E Corp. 2019 annual shareholder 

meeting.

In designing the Postpetition Board Compensation, PG undertook a comprehensive analysis of 

director compensation of the Debtors’ peer group of investor-owned utilities (the “Peer Companies”) 

and the Standard & Poor’s 250 Index (the “Index Companies”).3

 My team and I have confirmed that 

the Postpetition Board Compensation falls at the low end of similar programs in the industry. 

The following is a summary of the principal economic elements of the Postpetition Board 

Compensation compared to the prepetition Board compensation arrangements: 

 2 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.

3 The Debtors’ Peer Companies include: The AES Corporation; Ameren Corporation; American 

Electric Power Company, Inc.; CenterPoint Energy, Inc.; Consolidated Edison, Inc.; Dominion Energy, 

Inc.; DTE Energy Company; Duke Energy Corporation; Edison International; Entergy Corporation; 

Eversource Energy; Exelon Corporation; FirstEnergy Corp.; NextEra Energy, Inc.; Public Service 

Enterprise Group Incorporated; Sempra Energy; The Southern Company; WEC Energy Group, Inc.; 

and Xcel Energy Inc.

Case: 19-30088 Doc# 4058 Filed: 10/01/19 Entered: 10/01/19 18:37:34 Page 4 of

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Prepetition Postpetition

Annual Cash Retainer $120,000 No change.

Annual Equity Award $140,000; paid in RSUs of

existing PG&E Corp. shares.

No change in dollar value; paid in 

reorganized PG&E Corp. shares.4

Total

(exclusive of the Chair of the Board, Committee 

Chairs, or special committee retainers and equity)

$260,000 No change.

PG&E Corp. Non-Executive Chair of the Board Annual Cash Additional Retainer

Annual Cash Retainer $100,000 No change.

Annual Equity Award $80,000; paid in RSUs of

existing PG&E Corp. shares.

No change in dollar value; paid in 

reorganized PG&E Corp. shares.

Utility Non-Executive Chair of the Board Annual Cash Additional Retainer

Annual Cash Retainer $30,000 No change.

Committee Chair Additional Annual Cash Retainer5

Ad Hoc Restructuring Committee $0 No change.

Audit Committee $50,000 No change.

Compensation Committee $20,000 No change.

Safety and Nuclear Oversight Committee $15,000 No change.

Other Permanent Standing Committees – PG&E 

Corp.

$15,000 No change.

Other Permanent Standing Committees – Utility $10,000 No change.

In assessing the reasonableness of the Postpetition Board Compensation, I worked with my 

team to benchmark the Boards’ compensation against (i) the Debtors’ Peer Companies and (ii) the

Index Companies and determined that the value of the Debtors’ proposed non-employee director 

compensation is aligned with the 25th percentile of the Peer Companies and Index Companies. The 

proposed median total direct compensation for the non-employee directors is $260,000. According to 

PG’s analysis, the median total direct compensation for non-employee directors is $275,715 and 

$293,500 for the Peer Companies and Index Companies, respectively. PG concluded the value of the 

Postpetition Board Compensation is reasonable especially in light of the Debtors’ fiscal year 2018 

revenues, which position them in the 83rd percentile of the Peer Companies.

In addition, my team and I determined that the Board members’ current cash retainer of 

$120,000 falls above the 75th percentile of board retainers for the Peer Companies and Index 

Companies and that the Debtors’ proposed equity-based compensation falls below the 50th percentile 

of the Peer Companies and 25th percentile of the Index Companies, respectively. In analyzing the 

 4 Prorated equity awards may be granted to future new directors based on their appointment date, at the 

discretion of the Board.

5 With respect to the Committee Chairs, no additional retainer will be paid by the Utility for any 

quarter during which the director is paid a retainer from PG&E Corp. for the same role.

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proposed mix of cash and equity-based components of the Postpetition Board Compensation, we 

determined that the mix is consistent with the market, with a split of 46% cash compensation and 54% 

equity-based compensation. The Peer Companies’ compensation mix consists of, on average, 45% 

cash compensation and 55% equity-based compensation and the Index Companies’ compensation mix 

consists of, on average, 43% cash compensation and 57% equity-based compensation.

Lastly, my team and I determined that absent approval of the Postpetition Board Compensation, 

non-employee directors’ current compensation, which consists solely of the cash retainer, would be the 

lowest offered among the Peer Companies and would fall below the 5th percentile of the Index 

Companies.

IV. Conclusion

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

cases, I believe that the Postpetition Board Compensation is reasonable in light of competitive market 

practice for other companies and comports with industry standards.

Case: 19-30088 Doc# 4058 Filed: 10/01/19 Entered: 10/01/19 18:37:34 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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