PG&E 2014 Annual Report Download - page 101

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93
NOTE 5: COMMON STOCK AND SHARE-BASED COMPENSATION
PG&E Corporation had 475,913,404 shares of common stock outstanding at December 31, 2014. PG&E Corporation held
all of the Utility’s outstanding common stock at December 31, 2014.
In February 2014, PG&E Corporation entered into a new equity distribution agreement providing for the sale of PG&E
Corporation common stock having an aggregate gross sales price of up to $500 million. During 2014, PG&E Corporation sold 11
million shares under the February 2014 equity distribution agreement for cash proceeds of $496 million, exhausting the capacity
under this agreement. This amount is net of commissions paid of $4 million.
In addition, PG&E Corporation issued common stock under the PG&E Corporation 401(k) plan, the Dividend
Reinvestment and Stock Purchase Plan, and share-based compensation plans. During 2014, 8 million shares were issued for cash
proceeds of $306 million under these plans.
Dividends
The Board of Directors of PG&E Corporation and the Utility declare dividends quarterly. Under the Utility’s Articles of
Incorporation, the Utility cannot pay common stock dividends unless all cumulative preferred dividends on the Utility’s preferred
stock have been paid. For 2014, the Board of Directors of PG&E Corporation declared a quarterly common stock dividend of
$0.455 per share.
Under their respective credit agreements, PG&E Corporation and the Utility are each required to maintain a ratio of
consolidated total debt to consolidated capitalization of at most 65%. In addition, the CPUC requires the Utility to maintain a
capital structure composed of at least 52% equity on a weighted average over four years. PG&E Corporation and the Utility are in
compliance with these restrictions. At December 31, 2014, the Utility had restricted net assets of $14.6 billion and was limited to
$153 million of additional common stock dividends it could pay to PG&E Corporation at December 31, 2014.
Long-Term Incentive Plan
The PG&E Corporation LTIP permits various forms of share-based incentive awards, including restricted stock awards,
restricted stock units, performance shares, and other share-based awards, to eligible employees of PG&E Corporation and its
subsidiaries. Non-employee directors of PG&E Corporation are also eligible to receive certain share-based awards. In May 2014,
the 2006 LTIP was terminated and the 2014 LTIP became effective. A maximum of 17 million shares of PG&E Corporation
common stock (subject to certain adjustments) has been reserved for issuance under the 2014 LTIP, of which 16,184,126 shares
were available for future awards at December 31, 2014.
The following table provides a summary of total share-based compensation expense recognized by PG&E Corporation for
share-based incentive awards for 2014, 2013, and 2012:
(in millions)2014 2013 2012
Restricted stock units $ 42 $ 36 $ 31
Performance shares 36 28 26
Total compensation expense (pre-tax) $ 78 $ 64 $ 57
Total compensation expense (after-tax) $ 47 $ 38 $ 34