Hawaiian Electric CEO's bonus lacked incentive to cut wildfire risk, documents show
By Tim McLaughlin and Tom Hals
(Reuters) — Hawaiian Electric’s CEO received an annual bonus last year tied to profit, worker safety and bolstering the supply of renewable energy, but not linked specifically to reducing wildfire risk, according to a Reuters review of company disclosures.
The state’s largest utility is being investigated over its role in the blaze that killed more than 114 people on the island of Maui earlier this month, the deadliest U.S. wildfire in a century. The county of Maui on Thursday sued Hawaiian Electric, accusing it of acting negligently by failing to shut down electric equipment, which the county said started the fire. Now, some investors, regulators and power industry analysts say pay incentives should be tied to cutting risk, a strategy that could help prevent catastrophic wildfire losses nationwide.
California utilities, which have also been blamed for deadly wildfires, have done so, but they are alone. “It’s a principle of human nature that people and businesses follow their incentives, so if we tie executive pay at many levels of the organization, not just the CEO, to safety and wildfire safety, then the organization will work harder to meet those goals,” said consultant Alison Silverstein, a former adviser to the U.S. Federal Energy Regulatory Commission. No cause has been identified. A class-action lawsuit blames the Honolulu-based utility company, alleging it failed to shut off power lines despite warnings that high winds might blow them down and spark wildfires. The utility declined to comment for this story. Hawaiian Electric CEO Shelee Kimura received a cash bonus in 2022 based on her performance against 10 measures including profit and customer satisfaction. Wildfire risk
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