Document:

STIP for Officers of PG&E Corporation and its Subs

    

      Exhibit
        10.20  

      

      

      2007
        OFFICER SHORT-TERM INCENTIVE PLAN 

       

      On
        December 20, 2006, the Nominating, Compensation, and Governance Committee
        (Committee) of the PG&E Corporation Board of Directors established the
        structure of the PG&E Corporation 2007 Short-Term Incentive Plan (STIP),
        under which officers of PG&E Corporation and Pacific Gas and Electric
        Company (Utility) are provided an opportunity to receive annual incentive
        cash
        payments. Corporate financial performance, as measured by corporate earnings
        from operations, will account for 50 percent of the incentive, 20 percent
        of the
        incentive will be based on customer satisfaction indices, 20 percent of the
        incentive will be based on the Utility’s success in implementing its strategy to
        achieve operational excellence and improved customer service, 5 percent will
        be
        based on the results of an employee opinion survey measuring employee
        engagement, and the remaining 5 percent will be based on achieving safety
        standards. 

      

      At
        its
        meeting on February 21, 2007, the Committee approved the specific
        performance scale that will be used to determine the extent to which the
        corporate financial objective, as measured by earnings from operations, has
        been
        met. The
        Committee used the same methodology to establish the performance scale for
        the
        corporate financial performance portion of the 2007 STIP as was used for
        the
        2006 STIP. The
        corporate financial performance measure is based on PG&E Corporation's
        budgeted earnings from operations that were previously approved by the Board
        of
        Directors, consistent with the basis for reporting and guidance to the financial
        community. As with previous earnings performance scales, unbudgeted items
        impacting comparability such as changes in accounting methods, workforce
        restructuring, and one-time occurrences will be excluded.

      

      The
        Committee also approved the 2007 performance targets for each of the four
        other
        measures set forth in the table below. The 2006 performance results for each
        measure are included for comparative purposes. 

      

       

      2007
        STIP Performance Targets1

      

      
        	
                Measure

              	
                Relative
                  Weight

              	
                 

              	
                2006
                  Results

              	
                 

              	
                2007
                  Target

              
	
                Customer
                  Satisfaction (Residential & Business)2

              	
                20%

              	
                 

              	
                100

              	
                 

              	
                676

              
	
                Business
                  Transformation Index3
                  

              	
                20%

              	
                 

              	
                N/A

              	
                 

              	
                1.0

              
	
                Employee
                  Survey (Premier) Index4 

              	
                5%

              	
                 

              	
                64.0%

              	
                 

              	
                66.0%

              
	
                Occupational
                  Safety and Health Administration (OSHA) Recordable Injury Rate5

              	
                5%

              	
                 

              	
                12.9%
                  reduction 

              	
                 

              	
                15%
                  reduction

              

      

      

      
        	
                1.

              	
                As
                  explained above, 50% of the STIP award will be based on achievement
                  of
                  corporate earnings from operations targets.

              

      

       

      2.    
        This
        measure reflects a weighted composite of the overall customer satisfaction
        indices of the Utility’s residential and business customers as reported by the
        J.D. Power Residential Survey and the J.D. Power Business Survey. For 2006,
        the
        residential customers’ and business customers’ scores were weighted equally. In
        an effort to enhance the focus on improving residential customer satisfaction,
        which has been lower than business customer satisfaction, for the 2007 target
        the weighting of the residential customers’ score will be increased to 60% and
        the weighting of the business customers’ score will be lowered to 40%. In
        addition, for 2007, J.D. Power and Associates has changed the scale used
        to
        report results from the J.D. Power Survey from a scale that attempted to
        center
        the industry average score at approximately 100 to a 1,000 point scale. By
        way
        of comparison, results for 2006 would have been 678 under the new 1000 point
        scale based on equally weighted scores and results for 2006 would have been
        673
        based on the revised weightings. The 2007 target may be adjusted to reflect
        changes in the J.D. Power industry average scores, which are expected by
        mid-year 2007.

       

      
        	
                3.

              	
                The
                  Business Transformation Index is comprised of five measurement
                  points that
                  define success in achieving key Business Transformation operational,
                  financial, and post-implementation objectives. The five measurement
                  points
                  are (1) overall Business Transformation cost performance in comparison
                  to
                  budgeted amounts, (2) overall business transformation benefit performance
                  in comparison to planned/budgeted amounts, (3) new business customer
                  connection performance for cycle time and number of customer commitments
                  met, (4) SmartMeterTM
                  project
                  performance for number of meters installed and activated, and (5)
                  the
                  extent to which core business transformation initiatives are implemented
                  compared to planned schedule and scope of initiatives.
                  

              

      

       

      
        	
                4.

              	
                The
                  Premier Survey is the primary tool used to measure employee engagement
                  at
                  PG&E Corporation and the Utility. The employee index is designed
                  around 15 key drivers of employee engagement. The average overall
                  employee
                  survey index score provides a comprehensive metric that is derived
                  by
                  adding the percent of favorable responses from all 40 core survey
                  items
                  (all of which fall into one of 15 broader topical areas), and then
                  dividing the total sum by 40.

              

      

       

      
        	
                5.

              	
                An
                  “OSHA Recordable” is an occupational (job-related) injury or illness that
                  requires medical treatment beyond first aid, or results in work
                  restrictions, death or loss of consciousness. The “OSHA Recordable Rate”
                  is the number of OSHA Recordables for every 200,000 hours worked,
                  or for
                  approximately 100 employees. This metric measures the percentage
                  reduction
                  in the Utility’s OSHA Recordable rate from the prior year.
                  

              

      

       

       

      The
        Committee has full discretion as to the determination of final officer STIP
        awards for 2007 performance.Resolution Director's Compensation

    Exhibit
      10.31

    Director
      Compensation

    

    RESOLUTION
      OF THE

    BOARD
      OF DIRECTORS OF

    PG&E
      CORPORATION

    

    December
      20, 2006

    

    BE
      IT
      RESOLVED that, effective January 1, 2007, directors who are not employees of
      this corporation or Pacific Gas and Electric Company (“non-employee directors”)
      shall be paid a retainer of $12,500 per calendar quarter, which shall be in
      addition to fees paid for attendance at Board and Board committee meetings;
      and

    

    BE
      IT
      FURTHER RESOLVED that, effective January 1, 2007, the non-employee director
      who
      serves as lead director shall be paid an additional retainer of $12,500 per
      calendar quarter; and

    

    BE
      IT
      FURTHER RESOLVED that, effective January 1, 2007, the non-employee directors
      who
      are duly appointed to chair the Finance Committee, the Nominating, Compensation,
      and Governance Committee, and the Public Policy Committee of this Board shall
      be
      paid an additional retainer of $1,875 per calendar quarter, and the non-employee
      directors who are duly appointed to chair the Audit Committee and the
      Nominating, Compensation, and Governance Committee of this Board shall be paid
      an additional retainer of $12,500 per calendar quarter; provided, however,
      that
      a non-employee director duly appointed to chair one of the foregoing committees
      shall not be paid an additional retainer for any calendar quarter during which
      such director also serves as lead director; and

    

    BE
      IT
      FURTHER RESOLVED that, effective January 1, 2007, non-employee directors shall
      be paid a fee of $1,750 for each meeting of the Board and for each meeting
      of a
      Board committee attended; provided, however, that non-employee directors who
      are
      members of the Audit Committee shall be paid a fee of $2,750 for each meeting
      of
      the Audit Committee attended; and

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    BE
      IT
      FURTHER RESOLVED that any non-employee director may participate in a Directors’
Voluntary Stock Purchase Program by instructing the Corporate Secretary to
      withhold an amount equal to but not less than 20 percent of his or her meeting
      fees and/or quarterly retainers for the purpose of acquiring shares of this
      corporation’s common stock on behalf of said director, provided that once a
      non-employee director has so instructed the Corporate Secretary, said director
      may not modify or discontinue such instruction for at least 12 calendar months;
      and

    

    BE
      IT
      FURTHER RESOLVED that non-employee directors shall be eligible to participate
      in
      the PG&E Corporation 2006 Long-Term Incentive Plan under the terms and
      conditions of that Plan, as adopted by this Board of Directors and as may be
      amended from time to time; and

    

    BE
      IT
      FURTHER RESOLVED that members of this Board shall be reimbursed for reasonable
      expenses incurred in attending Board or committee meetings; and

    

    BE
      IT
      FURTHER RESOLVED that, effective January 1, 2007, the resolution on this subject
      adopted by the Board of Directors on June 16, 2004, is hereby
      superseded.

    

    
      
         

      

      
        2

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