About a dozen enraged Californians voiced their anger and frustration over high gas bills during a hearing this week of the California Public Utilities Commission.
Several Southern California residents complained Thursday to the agency that oversees the state’s public utilities about the monopoly power of Southern California Gas Co. and San Diego Gas & Electric, who service some 25 million customers in the region.
The companies have blamed volatility in the wholesale price of natural gas for the higher rates that are passed on to consumers. But the higher rates follow recent increases in pay for the company’s top executives.
According to 2022 filings with the Securities Exchange Commission, Sempra Energy — the parent company of SoCalGas and SDG&E — rewarded its executives handsomely. Though net income was down in 2021, Chief Executive Jeffrey W. Martin made nearly $25 million in total compensation that year, up from $23 million in 2020 and $20 million in 2019. Chief finance officer Trevor I. Mihalik was paid over $7 million in 2021, and Group President Kevin C. Sagara made over $8 million, both up from the prior year.
The deadline for publicly traded companies to file compensation numbers for 2022 is May 1 and won’t be made public until later this year.
Sempra’s leaders are far from the only executives in corporate America to see compensation increases as consumers pay more for products or services or endure the layoffs and furloughs inflicted by the pandemic.
While executive compensation rose, the company made a net income of $1.34 billion in 2021, down from $4.17 billion in 2020 and $1.86 billion in 2019, according to another SEC filing.
The compensation increases did not end there. Martin, Mihalik and Segara have also accumulated pension benefits through the company’s “Supplemental Executive Retirement Plan” totaling nearly $60 million.
In all, the company’s obligations to the three executives at the end of 2021 totaled about $100 million.
If that sounds like a big number, it is. That would be enough to pay the climate credit rebate — around $50 — for 2 million households, or about a third of the company’s natural gas meters in Southern California.
Put differently, that could cover a $500 rebate for 200,000 households struggling with the higher cost of gas. If the company’s $1.34 billion in net profit were distributed as well, nearly 3 million households would each get a $500 rebate.
Gas bills are expected to begin dropping soon, as SoCalGas recently announced a 68% decrease in prices for February versus January. Prices will still be significantly higher than they were a year ago.
In response to questions about compensation, a Sempra spokesperson said in a written statement that shareholders, not ratepayers, pay the executives. Executive pay is “determined by criteria listed in public filings which include factors like public safety, employee safety and reliability,” they said.
“We encourage consumers who are struggling to contact their local utility to discuss solutions,” the statement concluded. The company declined to say whether executives would be taking a pay cut this year in light of customer hardships brought about by higher rates.
While the commission voted unanimously to expedite the payment of an annual $50.77 credit to SoCalGas customers and a $43.40 credit to SDG&E customers, that didn’t appease one frustrated caller.
“It’s 61 degrees in my Los Angeles apartment,” the woman complained to the CPUC. Referencing the commission members and the gas executives, she added: “I’m sure you all are comfortable.”
