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This excerpt taken from the PCG DEF 14A filed Apr 2, 2008. Item No. 4: Shareholder Proposal Mr. Ray T. Chevedden, holder of 3,000 shares of PG&E Corporation common stock, has given notice of his intention to present the following proposal for action at the PG&E Corporation annual meeting:
"4 – Shareholder Say on Executive Pay RESOLVED, that shareholders of our company request our board of directors to adopt a policy that provides shareholders the opportunity at each annual shareholder meeting to vote on an advisory resolution, proposed by management, to ratify the compensation of the named executive officers ("NEOs") set forth in the proxy statement's Summary Compensation Table (the "SCT") and the accompanying narrative disclosure of material factors provided to understand the SCT (but not the Compensation Discussion and Analysis). The proposal submitted to shareholders should make clear that the vote is non-binding and would not affect any compensation paid or awarded to any NEO. Investors are increasingly concerned about mushrooming executive pay which often appears to be insufficiently aligned with the creation of shareholder value. As a result, in 2007 shareholders filed more than 60 "say on pay" resolutions with companies, averaging a 42% vote. In fact, seven resolutions exceeded a majority vote. Aflac (AFL) decided to present such a resolution to a shareholder vote in 2009. A bill to provide for annual advisory votes on executive pay passed in the U.S. House of Representative by a 2-to-1 margin. Unfortunately, our management used a technicality to prevent us from voting on this ascending topic at our 2007 annual meeting. Another reason for this proposal is the $14 million in pay in a year for Mr. Glynn, our Chairman during our years of bankruptcy. Our dividend was also suspended for years under Mr. Glynn's watch. The advantage of adopting this proposal should also be considered in the context of our company's overall corporate governance. For instance in 2007 the following governance status was reported:
The above status shows there is room for improvement and reinforces the reason to take one step forward now and vote yes: Shareholder
Say on Executive Pay – The Board of Directors of PG&E Corporation Recommends a Vote AGAINST This Proposal. The Board of Directors believes in the importance of good corporate governance and appreciates the corporate governance arguments that are made in favor of "say on pay." However, the Board believes that "say on pay" is not appropriate for PG&E Corporation at this time, and recommends that shareholders vote against this proposal. The PG&E Corporation Board of Directors, with assistance from its Nominating and Governance Committee, monitors developments and trends in corporate governance against the backdrop of the Corporation's existing practices and the emerging legal and regulatory environment. The Committee recommends adoption of new corporate governance polices and practices as appropriate. 37 We believe this review process produces the right results for PG&E Corporation, as evidenced by the fact that the Corporation's corporate governance practices consistently receive high ratings from independent ratings firms such as RiskMetrics Group (whose "Corporate Governance Quotient" ratings are cited in company profiles on Yahoo! Finance) and by GovernanceMetrics International. As of March 6, 2008, PG&E Corporation's Corporate Governance Quotient was better than 95.9% of the companies in the S&P 500 index and 98.4% of the S&P 500 companies in the utilities sector. As rated by GovernanceMetrics International, PG&E Corporation's overall governance score was a 9.0 as of February 15, 2008 using a scale of 1.0 (lowest) to 10.0 (highest). In response to the proponent's claims, we also note that PG&E Corporation has had an independent lead director since 2003. Also, PG&E Corporation adopted majority voting in 2007, and California law does not permit California corporations to have both cumulative voting and majority voting at the same time. The Nominating and Governance Committee has reviewed "say on pay," and has decided that, at this time, it would be in the Corporation's best interest to monitor how "say on pay" develops and learn from the experiences of other companies that adopt this proposal as to how it might fit into the Corporation's overall corporate governance structure. For example, as noted above, majority voting is new at PG&E Corporation and will be used for the first time at PG&E Corporation's 2008 annual meeting. We believe that majority voting provides shareholders with an effective say on our Board's performance. In addition, there are other existing communication channels that provide our shareholders with an effective mechanism for communicating their views. We also note that new executive compensation disclosures have been in place for only one proxy season, and we cannot yet determine fully whether these additional disclosures are sufficient to respond to the concerns that motivate "say on pay." At this time, we also have a number of other questions and concerns with "say on pay." For example:
For these reasons, the PG&E Corporation Board of Directors unanimously recommends that shareholders vote AGAINST this proposal. This excerpt taken from the PCG DEF 14A filed Mar 14, 2006. Item No. 3: Shareholder Proposal Mr. Ray T. Chevedden, 5965 S. Citrus Avenue, Los Angeles, California 90043, holder of 3,000 shares of PG&E Corporation common stock, has given notice of his intention to present the following proposal for action at the PG&E Corporation annual meeting: "3 – Redeem or Vote Poison Pill RESOLVED, Shareholders request that our Board redeem any future or current poison pill, unless such poison pill is subject to a shareholder vote as a separate ballot item, to be held as soon as may be practicable. Charter or bylaw inclusion if practicable. Thus there would be no loophole to allow exceptions to override the implementation of a shareholder vote as soon as may be practicable. Since a vote would be as soon as may be practicable, it accordingly could take place within 4-months of the adoption of a new poison pill. To give our board valuable insight on our views of their poison pill, a vote would occur even if our board had promptly terminated a new poison pill because our board could turnaround and readopt their poison pill. Shareholder Accountability Sadly Lacking at Our 2005 Annual Meeting The ability to have a shareholder vote on a management poison pill would focus our management on greater accountability. Shareholder accountability was sadly lacking at our April 20, 2005 annual meeting. Our management moved the meeting out of San Francisco – creating a hardship for shareholders who live in San Francisco and do not have a car. At our 2005 annual meeting I do not believe our management followed the definitive proxy it filed with the SEC establishing the order of business. Apparently our management intended that the formal discussion of ballot items 1 through 8 would take about 5 minutes. It was a surprise that the company flashed the voting results for all 8 ballot items on a screen and shortly thereafter opened the meeting to random questions. It was amazing how fast the first person jumped up to ask the first question – "company-ringer" concern. Proponents of the five formal 14a-8 proposals had to interrupt the random questions to introduce their proposals. (If proponents did not formally introduce their proposals at the meeting, PG&E could argue that the votes do not count.) Our new CEO, Mr. Darbee did not initiate a call to any proponent to present a proposal. These random questions were readily accepted by our management. Some questions appeared to be planted by company "ringers." This included soft-ball questions and testimonials of praise. Our management had a group of uniformed military personnel wait throughout the entire 2-plus hour meeting before properly acknowledging them. Our management has repeatedly ignored requests for a transcript of this confusing and rude annual meeting. Pills Entrench Current Management "Poison Pills... prevent shareholders, and the overall market, from exercising their right to discipline management by turning it out. They entrench the current management, even when it's doing a poor job. They water down shareholders' votes and deprive them of a meaningful voice in corporate affairs." "Take on the Street" by Arthur Levitt, SEC Chairman, 1993-2001 Stock Value If a poison pill makes our stock difficult to sell at a profit – the value of our stock could suffer. Redeem
or Vote Poison Pill 30 The Board of Directors of PG&E Corporation Recommends a Vote AGAINST This Proposal. This proposal is unnecessary. The PG&E Corporation Board of Directors voted in February 2004, to terminate the shareholder rights plan (poison pill), in response to shareholders who supported a shareholder proposal on this topic at the Corporation's 2003 annual meeting. Also, in furtherance of the Corporation's commitment to good corporate governance, in June 2004, the Board of Directors adopted a policy to submit the adoption or extension of a shareholder rights plan to a shareholder vote within 12 months of the adoption or extension. This policy was adopted in response to a shareholder proposal on this topic that was approved at the Corporation's 2004 annual meeting. The 12-month period in the Corporation's policy provides the Board of Directors a reasonable amount of time to seek a shareholder vote on any new shareholder rights plan that the Board may adopt if it decides that such a plan is in the best interest of shareholders. The 12-month period also is consistent with the policy of Institutional Shareholder Services, a leading proxy advisory firm. The proponent recommends that the Board obtain a shareholder vote within only four months of taking action. As a practical matter, this time period might not be sufficient for the Corporation to obtain, tally, and process the over 345,000,000 votes from the over 200,000 individuals who hold shares either in their own names or through brokers and other third parties. The proponent's objection to the conduct of the Corporation's 2005 annual meeting is not justified, nor is it relevant to the subject matter of this proposal. Contrary to the proponent's claims, the format of the Corporation's 2005 annual meeting was designed to increase shareholder participation and management accountability to shareholders. The location of the meeting was more accessible to the Corporation's many shareholders living outside San Francisco. Unnecessary formalities were removed to provide more time for shareholders to share their thoughts with management and the Board, and to give a wider variety of shareholders an opportunity to speak and ask questions during the meeting. All of the proposals included in the Corporation's 2005 proxy statement were presented at the annual meeting for voting and each individual who represented a shareholder proposal had an opportunity to speak about that proposal at the meeting. Preliminary voting results were presented during the meeting, consistent with past practice. For these reasons, the PG&E Corporation Board of Directors unanimously recommends that shareholders vote AGAINST this proposal. | EXCERPTS ON THIS PAGE:
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