The same year a broken Sempra Energy storage well created the biggest natural gas leak in U.S. history, CEO Debra Reed earned her largest bonus yet.
While Reed received no payout for the part of her 2015 bonus that’s tied to customer satisfaction and pipeline safety at two Sempra utilities, amounting to about $130,000, she was awarded $3.17 million because the company’s earnings exceeded targets, according to a company statement. Her total pay package was $16.1 million in the fiscal year ending Dec. 31.
Reed’s compensation was the most among CEOs of utilities in the Standard & Poor’s 500 Index, which reported pay for the 2015 fiscal year, according to data compiled by Bloomberg. The cuts to Reed’s bonus, amounting to less than 1% of her total pay package, came as the well in Southern California Gas Co.’s Aliso Canyon field leak forced thousands of residents to temporarily relocate.
“The board is sending completely the wrong message to the company’s regulators and customers by paying CEO Reed a record bonus, irrespective of the small haircut it applied in light of the leak,” said Michael Pryce-Jones, director of corporate governance at CtW Investment Group, which advocates for pension funds that collectively manage $250 billion.
The board raised Reed’s salary by 20% to $1.35 million, to match the median pay for comparable CEOs. She also received restricted stock worth $7.16 million that will vest if the company meets targets for shareholder return and earnings per share growth in the next three years.