Home Letter from the Chairman Report Overview Global Reporting Initiative Feedback
 
   

Corporate Governance

  At PG&E, our long-standing conviction is that integrity is fundamental to our success and that transparency is critical to allowing investors and others to make informed decisions about our company. Integrity and transparency create the basis for the trust between our company and the many stakeholders on whom our business depends, including our employees, our shareholders, our customers, our communities and our regulators. Because we believe this trust is essential, we consistently strive to
hold our conduct to the highest standards of integrity and to provide timely and meaningful disclosures about our business and its operations. Not only is this approach necessary in today's business world, it is the right thing to do. This belief is one of the key reasons why PG&E has placed significant emphasis on our corporate governance policies and practices and decided to highlight them in this report.
Corporate Governance Rankings
Some examples of 2006 activities include the following:
In response to new Securities and Exchange Commission (SEC) requirements for the 2007 proxy season, PG&E enhanced a number of its disclosures regarding director and executive compensation, related party transactions and general corporate governance in 2006. These enhancements include:
Providing a new narrative section in the 2007 Joint Proxy Statement of PG&E Corporation and Pacific Gas and Electric Company called the "Compensation Discussion and Analysis," which explains the material elements of executive compensation and provides additional information regarding compensation policies and decisions.
Adopting a new policy governing Audit Committee review of transactions that involve company directors or officers, or entities that own more than 5 percent of either company's securities.
Amending the Charter of the PG&E Corporation Board of Directors' Nominating, Compensation and Governance Committee to reflect the new SEC rules.
To more closely align the interests of directors and shareholders, in 2006, both PG&E Corporation and the Utility adopted director stock ownership guidelines. These guidelines encourage directors to own a significant equity interest in PG&E Corporation within a reasonable time after election to the Board. The stock ownership target is $200,000, which is measured at the time the stock is acquired or on the first business day of 2007, whichever is later. The time period for directors to achieve this target is five years from the date of election to the Board or five years from December 20, 2006, which is the adoption date of the guidelines. Senior officers of PG&E Corporation and the Utility have been subject to stock ownership targets since 1997.
 
To reflect the growing importance of climate change, we amended the Charter of the PG&E Corporation Board of Directors' Public Policy Committee to include specific oversight of climate change-related issues. This committee has oversight for many areas addressed in this Corporate Responsibility Report, including, but not limited to, corporate philanthropy, supplier diversity, workforce diversity and environment.
 
Our Corporate Governance Guidelines are published annually in PG&E's Joint Proxy Statement and are also posted at www.pgecorp.com, along with our Board Committee Charters, director and employee codes of conduct and PG&E Corporation Disclosure Policy. For additional information on directors and Board Committees, please see pages 176 to 179 of our 2006 Annual Report to Shareholders.

Back to top