Debra L. Reed, CEO of the energy company responsible for massive environmental catastrophe in Porter Ranch, California and head of parent company Sempra, does not seem to be facing any financial backlash in the wake of the gas leak. Reed has only taken a minimal pay cut while receiving a huge bonus.
According to Los Angeles Times columnist Michael Hiltzik’s report, “you may be appalled to hear that her penalty comes to all of $130,000, and that she’s still getting a $3.17-million bonus.” “It brings her total compensation for 2015 to $16.1 million, meaning that her executive penalty for presiding over the worst environmental disaster since the BP oil spill comes to about eight tenths of 1% of her pay.”
The gas leak was first discovered on October 23. After four months of natural gas spewing into the atmosphere, the gas company finally successfully capped the leak on February 18. The leak followed years of known issues with the deteriorating infrastructure within the company. Rate hikes were suggested in order to finance the inspections, though the position of the state Public Utilities Commission was that the company was obligated to make the inspections and repairs out of pocket.
The massive disaster resulted in the release of 100,000 tons of methane, making it the largest methane leak in United States history, and scores of Porter Ranch residents has to be relocated. Methane has a greenhouse effect that traps energy from the sun in the earth’s atmosphere.
From the L.A. Times:
“The health consequences for thousands of residents are unclear. Legally speaking, the leak is a black hole that could suck Reed’s operational record into the void.
The position of the Sempra board of directors, on the other hand, is that the Porter Ranch disaster is a ‘safety [and] customer satisfaction’ issue warranting minimal penalties for the executives who presided over it. The board’s discussion of its compensation policies is a pure distillation of the reality that corporate executives can collect huge raises despite underperformance in key areas.”
— InsideClimate News (@insideclimate) March 30, 2016
Paula Cracium, president of the Porter Ranch Neighborhood Council said, “This sends out a signal that as long as the dollars are there, the impact on people, homes and the environment doesn’t matter.”