PG&E to Restructure Board In Settlement With Activist -- WSJ
April 23 2019 - 3:02AM
Dow Jones News
By Katherine Blunt
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 23, 2019).
PG&E Corp. on Monday settled a dispute with an activist
investor by restructuring its board to include another director
with utility experience, and adding a safety specialist to advise
its chief executive.
The company said former utilities executive Fred Buckman will
replace former chairman Richard Kelly, who has resigned from the
board. Chris Hart, former chairman of the National Transportation
Safety Board, will serve as a special adviser to incoming chief
executive Bill Johnson.
The appointments end an activist campaign by BlueMountain
Capital Management, which owns 2.5% of PG&E shares. The hedge
fund last month nominated 13 candidates to PG&E's board,
including Messrs. Hart and Buckman.
PG&E earlier this month appointed its own slate of directors
after working with three hedge funds that together own 10% of the
company's shares. They included former Federal Energy Regulatory
Commissioner Nora Mead Brownell, who is now chairman of the board.
It also appointed several restructuring experts and financiers.
The appointments received pushback from California Gov. Gavin
Newsom, who criticized the board for its "large representation of
Wall Street interests." Michael Picker, president of the California
Public Utilities Commission, expressed similar concerns at a
meeting last week.
As part of the settlement, BlueMountain agreed to vote all of
its shares in favor of each of PG&E's nominees at the annual
meeting this year. PG&E announced last week that it would
reschedule the meeting from May 21 to sometime in June to allow
additional time to restructure the board.
"We believe the changes and other undertakings announced today
reflect the Boards' commitment to improving their governance and
oversight," BlueMountain co-founder and chief investment officers
Andrew Feldstein said in a statement.
The new board faces steep challenges. PG&E sought bankruptcy
protection earlier this year following a series of deadly wildfires
in its service territory, many tied by state investigators to its
equipment, that it estimates have triggered more than $30 billion
in potential liability claims against the company. PG&E has
pledged to spend billions of dollars to improve the safety of its
electric equipment before the next fire season.
Mr. Hart was involved in an assessment of the natural gas
distribution system in Massachusetts following a series of pipeline
explosions north of Boston last year. He is the founder of Hart
Solutions LLC, a consulting firm focused on safety and
reliability.
"As we enter another fire season, we can't overemphasize the
importance of safety," PG&E interim CEO John Simon said in a
statement. "Retaining a former industry regulator with Mr. Hart's
expertise reflects that commitment to strengthening our safety
culture."
Mr. Buckman previously served as chief executive of Consumers
Energy. He also has served as chief executive of PacifiCorp, a
utility owned by Warren Buffett's Berkshire Hathaway Inc. that
operates in Northern California and five other states.
PG&E said it will hold a vote at the annual meeting to
expand its board to include 15 members. It plans to appoint another
independent director with clean-tech expertise in the future.
Write to Katherine Blunt at Katherine.Blunt@wsj.com
(END) Dow Jones Newswires
April 23, 2019 02:47 ET (06:47 GMT)
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