WHEREAS, this Board of Directors believes that it is in the best interests of this corporation to divide the current Nominating, Compensation, and Governance Committee of this Board into two separate committees: (1) a Compensation Committee, which would assist the respective Boards of Directors of this corporation, Pacific Gas and Electric Company, and any other subsidiary whose Board is not composed entirely of employees of this corporation or its subsidiaries or affiliates (hereinafter referred to as “subsidiaries with non-employee directors”) on matters generally related to director, officer, and employee compensation, and the evaluation and oversight of management, and (2) a Nominating and Governance Committee, which would assist such Boards on matters relating to director nominations, corporate governance, and the evaluation and oversight of directors;
NOW, THEREFORE, BE IT RESOLVED that, effective January 1, 2008, a Compensation Committee of this Board of Directors hereby is established to consist of at least three directors, appointed by and serving at the pleasure of the Board of Directors, one of whom shall be appointed by this Board of Directors as the Committee’s chair, and each of whom shall satisfy independence and qualification criteria established by this Board of Directors, as set forth in this corporation’s Corporate Governance Guidelines; and that, to the extent practicable, at least two members of the Compensation Committee shall also qualify as “outside” directors within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, and as “non-employee” directors within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
BE IT FURTHER RESOLVED that the basic responsibility of the Compensation Committee shall be to advise and assist this Board, the Board of Directors of Pacific Gas and Electric Company, and the Board of Directors of any other subsidiary with non-employee directors with respect to the compensation of directors; certain policies and practices regarding employment, compensation, and benefits; and the development, selection, and compensation of policy-making officers. The Compensation Committee shall have the sole authority to retain and terminate any firm as it deems necessary or appropriate to assist the Committee in exercising its duties and responsibilities, including assisting the Committee in the evaluation of the compensation of the Chief Executive Officer and other elected officers of PG&E Corporation, Pacific Gas and Electric Company, and any subsidiaries with non-employee directors, and to approve such firm’s fees and other retention terms. More specifically, the Compensation Committee shall:
- (a) Review and discuss with management the Compensation Discussion and Analysis (“CD&A”) required by the Securities and Exchange Commission (“SEC”) and, based on such review and discussion, recommend to this Board whether the CD&A should be included in the corporation’s annual proxy statements or annual reports on Form 10-K filed with the SEC; and (b) perform a similar function for Pacific Gas and Electric Company and any other subsidiary with non-employee directors.
- (a) Produce a Compensation Committee Report for inclusion in this corporation’s annual proxy statements or annual reports on Form 10-K filed with the SEC, indicating whether the Committee has reviewed, discussed, and recommended the CD&A; and (b) perform a similar function for Pacific Gas and Electric Company and any other subsidiary with non-employee directors.
- Review and recommend to this Board the amount and form of compensation and benefits to be received by directors of this corporation who are not employees of this corporation or of a subsidiary or affiliate, including benefits under incentive compensation plans and equity-based plans, and perform a similar function with respect to the compensation and benefits to be received by such directors of Pacific Gas and Electric Company and any other subsidiary with non-employee directors.
- Review and approve the overall compensation philosophy and objectives of this corporation, and review certain employee compensation and benefits policies and practices of this corporation and its subsidiaries.
- (a) Review and, as applicable, approve (or recommend that this Board or the Boards of Directors of subsidiary companies approve) (i) executive compensation and benefits plans and arrangements, (ii) short-term incentive plans that include officers, (iii) tax-qualified pension plans, (iv) equity-based plans for employees, (v) funded welfare benefit plans, and (vi) any other compensation plan or arrangement to the extent board-level approval is required for such plans; and (b) approve amendments to such plans as may be designated by this Board or by the Board of Directors of a subsidiary.
- (a) Annually review and approve the corporate goals and objectives of the Chief Executive Officer of this corporation, and evaluate the performance of the Chief Executive Officer in light of the approved performance goals and objectives; (b) review and recommend to the independent members of this Board of Directors the salary and other compensation of the Chief Executive Officer of this corporation, including determining the long-term incentive component of the Chief Executive Officer’s compensation after considering this corporation’s performance and relative shareholder return and the value of similar incentive awards granted to chief executive officers of comparable companies and the incentive awards granted to the Chief Executive Officer in past years; (c) review and act upon the recommendations of the Chief Executive Officer of this corporation concerning salaries and other compensation of all “officers” of this corporation, as defined in Rule 16a-1(f) under the Exchange Act (“Section 16 Officers”); and (d) review and act upon the recommendations of the Chief Executive Officer of this corporation concerning salaries and other compensation of all other officers (other than Assistant Corporate Secretaries and Assistant Treasurers); provided, however, that the Committee may, at its discretion, delegate to the Chief Executive Officer of PG&E Corporation the authority to approve salary and other compensation of officers of this corporation (except Section 16 Officers) whose responsibilities or level of compensation the Committee deems to be more appropriate to be approved by the Chief Executive Officer.
- (a) Review and recommend to the independent members of the Board of Directors of Pacific Gas and Electric Company the salary and other compensation of the Chief Executive Officer of that company; (b) review and act upon the recommendations of the Chief Executive Officer of PG&E Corporation concerning salaries and other compensation of all Section 16 Officers of Pacific Gas and Electric Company; and (c) review and act upon the recommendation of the Chief Executive Officer of PG&E Corporation concerning salaries and other compensation of all other officers of Pacific Gas and Electric Company (other than Assistant Corporate Secretaries and Assistant Treasurers); provided, however, that the Committee may, at its discretion, delegate to the Chief Executive Officer of PG&E Corporation the authority to approve salary and other compensation of officers of Pacific Gas and Electric Company (except Section 16 Officers) whose responsibilities or level of compensation the Committee deems to be more appropriate to be approved by the Chief Executive Officer; and (d) perform a similar function with respect to compensation paid to chief executive officers, Section 16 Officers, and other officers of the other subsidiaries with non-employee directors, with similar power of delegation to the Chief Executive Officer of PG&E Corporation.
- Review and act upon the recommendations of the Chief Executive Officer of PG&E Corporation concerning the salaries and other compensation of the officers of all other subsidiaries (other than Assistant Corporate Secretaries and Assistant Treasurers); provided, however, that the Committee may, at its discretion, delegate to the Chief Executive Officer of PG&E Corporation the authority to approve salary and other compensation of officers whose responsibilities or level of compensation the Committee deems to be more appropriate to be approved by the Chief Executive Officer.
- (a) Oversee the evaluation of the management of this corporation; (b) review long-range planning for officer development and succession; and (c) perform a similar function for Pacific Gas and Electric Company.
- Conduct an annual performance evaluation of the Committee.
- Report regularly to this Board of Directors and the Board of Directors of Pacific Gas and Electric Company, as appropriate, on the Committee’s deliberations and actions taken, and deliberations or actions taken by any formal subcommittees that may be established by the Committee.
BE IT FURTHER RESOLVED that the Compensation Committee is authorized to establish one or more subcommittees vested with any authority held by the Committee, and shall establish appropriate charters and procedures for operation of any such subcommittees; and
BE IT FURTHER RESOLVED that the Compensation Committee shall fix its own time and place of meetings and shall prescribe its own rules of procedure; and
BE IT FURTHER RESOLVED that, unless otherwise designated by the Committee, the Corporate Secretary of this corporation, or an Assistant Corporate Secretary, shall serve as a secretary to the Compensation Committee; and
BE IT FURTHER RESOLVED that, effective January 1, 2008, the resolution establishing the Nominating, Compensation, and Governance Committee adopted by the Board of Directors on December 20, 2006 is hereby superseded. |
