SAN FRANCISCO (AP) _ The president of California's biggest utility defended a request for $17.5 million in employee bonuses Thursday, saying the money will keep top executives from leaving the bankrupt company.
``The restoration of the company's financial health requires that we have a rank-and-file team,'' said Gordon Smith, president of Pacific Gas and Electric Co. ``Retention is a key factor.''
PG&E filed for Chapter 11 bankruptcy protection on April 6 after running up billions of dollars in losses, largely because of California's botched experiment with deregulation. The crisis has led to rolling blackouts and sharply higher electricity rates.
The bonus program, which requires court approval, is designed to encourage about 226 top managers to remain with the company through the next two years, the utility said.
PG&E's petition for the bonuses has drawn fire from consumer critics, who for months have argued the utility's management could have avoided the financial crisis if it had reacted more swiftly.
The utility offered a defense of the bonuses at a meeting with representatives of hundreds of creditors.