PG&E Nears a Deal With Investor to Bump One Board Member
(Bloomberg) -- PG&E Corp. reached a deal to replace one of its board members with a director proposed by an activist investor, while also naming a former federal safety official as an adviser to help guide the bankrupt utility’s restructuring.
Fred Buckman, the former head of the utility Consumers Energy, will join PG&E’s board as part of an agreement with BlueMountain Capital Management, according to a statement Monday. He will replace Richard Kelly, who resigned after recently serving as chairman.
PG&E, which filed for bankruptcy in January, proposed adding an additional spot to its board, expanding it to 15 directors. It also named Chris Hart, the former chairman of the National Transportation Safety Board, as a special independent safety adviser who will report directly to new Chief Executive Officer Bill Johnson.
Buckman, who also formerly headed the utility PacifiCorp that has operations in California, and Hart were both named on a slate of directors put forward by BlueMountain in March. Their appointments were reported earlier Monday by Bloomberg News. PG&E’s shares rose as much as 2.2 percent in extended trading.
PG&E’s board selection process has come under the microscope as investors, lawmakers and regulators jostle over who will lead the San Francisco-based company out of the biggest utility bankruptcy in U.S. history. Both California’s top utility regulator and Governor Gavin Newsom have raised concerns about the makeup of PG&E’s recent board appointments.
See also: California Utilities Want Customers to Pay for Higher Fire Risks
PG&E announced last week that it had pushed back its annual general meeting from May 21 to sometime in June to allow for some additional time following a substantial refreshment of the board this month.
Talks between the utility and BlueMountain have been ongoing since PG&E reached an agreement with another group of investors -- Knighthead Capital Management, Redwood Capital Management and Abrams Capital Management -- that saw 10 new directors appointed to the board alongside three incumbent directors. Johnson, the new CEO, is slated to join the board as a 14th director at a later date, subject to a shareholder vote, under the terms of the original deal.
California Public Utilities Commission President Michael Picker has said he is concerned about whether the new board members appointed this month could provide the direction and accountability that the state would like. His comments echo those of Newsom, who has voiced criticism about the board’s makeup.
BlueMountain, which owns a 2.5 percent stake in PG&E, agreed to vote all of its shares in favor of the company’s board nominees, according to the statement. The asset management firm also agreed to withdraw its slate of directors.
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