Peter A. Darbee, SVP, CFO, and treasurer of PG&E Corp., whose utility unit recently sought protection under Chapter 11 of the U.S. Bankruptcy Code, took home more than $860,000 last year.
In 2000, Darbee was paid $415,000 in salary, more than triple his salary in 1999, according to the San Francisco-based company’s recently released proxy. He also received $445,306 in other compensation. Darbee did not receive a bonus last year. His total compensation was $860,306.
In 1999, Darbee received $113,864 in salary, $19,781 in a long-term payout, as well as a bonus of $133,333. He also received $451,290 in other compensation, bringing his total compensation to $718,268 for 1999.
For both years, “other compensation” included officer benefit allowances, payments of related taxes, and dividend equivalent payments on performance units under the company’s performance unit plan. It also included contributions to defined contribution retirement plans, premiums on indemnity policies, above-market interest on deferred compensation, and relocation allowances.
Darbee joined PG&E in September, 1999. Prior to that, Darbee was VP and CFO of Advanced Fibre Communications Inc. , a Petaluma, Calif.- based telecommunications industry manufacturer of digital loop carrier systems. Before joining AFC, he was VP, CFO, and controller of Pacific Bell.
Earlier, he was an investment banker with Goldman Sachs, where he was VP and co-head of its telecommunications group.
Darbee received his bachelor’s degree in economics from Dartmouth College and an MBA from the Amos Tuck School of Business at Dartmouth.
When Darbee was first hired to PG&E Corp., the company was boasting 1998 revenues of almost $20 billion, $33 billion in assets, and operations in 27 states. Just a couple of years later, the utility giant faces the extreme.
Utility deregulation has forced PG&E Corp.’s utility unit to file for Chapter 11, as its costs for power have soared well beyond what it is permitted to recoup from its customers.
In a recent press release, PG&E Corp. reported that the absence of certain regulatory treatment facing its Calif. utility unit required the unit to record an after-tax accounting charge of $4.1 billion against its income for the year. The company could no longer meet the accounting standards requiring probable recovery of more than $6 billion in wholesale costs incurred by Pacific Gas and Electric Co. last year to buy power on behalf of its utility customers. As a result of the charge, PG&E Corp. reported a net loss for the year of $3.4 billion.
“While standard accounting rules required the utility to record a charge against earnings for un-reimbursed wholesale and transition costs, taking this charge does not diminish our conviction that the utility is entitled under law to recover these costs, nor does it diminish our ongoing lawsuit in Federal District Court,” said PG&E Corp.’s chairman, CEO, and president, Robert D. Glynn, Jr., in a statement.
Excluding this charge and other non-recurring items, PG&E Corp. reported net income from operations for the year of $925 million, compared with net income from operations in 1999 of $826 million–a 13 percent increase. On an operating basis, the company’s results exceeded its goal to grow operating earnings by 8 percent to 10 percent per year. The increase in net income from operations primarily reflects the continued growth and strong performance of the corporation’s unregulated business unit, the National Energy Group, which grew its earnings from operations by 165 percent over 1999. Income contributions from Pacific Gas and Electric Co. for 2000 rose about 2 percent over 1999 results.
“While overshadowed by the extraordinary impacts of the California energy crisis,” said Glynn, “we demonstrated continued solid performance on an operating basis. We are proud of that accomplishment, even as we are deeply dissatisfied at reporting a substantial net loss due to the uncertainty around the recovery of our wholesale power and transition costs.”