Section 451.5 Of Article 1. Rates From California Public Utilities Code >> Division 1. >> Part 1. >> Chapter 3. >> Article 1.
451.5
. (a) Any expense resulting from a bonus paid to an executive
officer of a public utility that has ceased to pay its debts in the
ordinary course of business shall not be recoverable either directly
or indirectly in rates and shall be borne exclusively by the
shareholders of the public utility. This prohibition shall be
operative for a period of no less than two years after the public
utility resumes paying its debts in the ordinary course of business,
and shall be operative for any additional time period as determined
by the commission.
(b) The requirements of subdivision (a) do not apply to a bonus
that is specifically defined in a standard employee compensation
contract.
(c) For purposes of this section, "executive officer" means any
person who performs policy making functions and is employed by the
public utility subject to the approval of the board of directors, and
includes the president, secretary, treasurer, and any vice president
in charge of a principal business unit, division, or function of the
public utility.