(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.