On March 13, the company announced performance compensation. This incentive compensation in the form of restricted stock options given to the CEO and the officers of the company over a period of three years.
The better the stock performs, the more value added to the stock compensation incentives. You’re doing everything a financial institution would do to increase the value of the stock and cheers from the analysts and shareholders. This looks good in the short run. But has anyone looked at the outlook in the long term?
There are signs of decay.
1. Ratepayers anger in several Golden State Water Service area over the high water rates.
2. Ongoing legal issues.
3. Lack of leadership focused on the replacement of aging water infrastructure.
It’s very simple. You provide good clean water at a reasonable rate to keep your ratepayers happy. When you switch your focus to make your shareholders happy at the expense of your ratepayers, you are heading down the path of destruction.
In 2006, Black and Veatch surveyed 453 cities and water districts. Golden State Water Company was among the highest in the state. Over the years, Golden State Water Company has remained one of the highest. The ratepayers have every right to be upset.