# Public Utilities (GPU)

## Title 4. Rate Regulation

### Subtitle 5. Prohibitions

#### Section 4-504

(a)

  (1) In this section the following words have the meanings indicated.

  (2)

    (i) "Bonus" means a form of direct or indirect payment, consideration, or compensation that is paid or conveyed to an employee of a public service company in addition to the employee's base pay.

    (ii) "Bonus" includes:

      (1) compensation that the public service company does not formally label as a bonus payment;

      (2) any form of incentive compensation the fact and amount of which is under the discretion of the public service company until a time close to the end of the period for which the incentive payment is paid; and

      (3) payments given in addition to base pay that are contingent on the occurrence of one or more events or conditions.

  (3)

    (i) "Compensation" means a form of payment or consideration conveyed to or for the benefit of an employee of a public service company, the parent company of a public service company, or any other affiliate of a public service company in connection with the employee's work for a public service company.

    (ii) "Compensation" includes:

      (1) direct and indirect methods of conferring benefits;

      (2) cash and noncash benefits;

      (3) salary, bonuses, period payments, and severance pay; and

      (4) the value of a perquisite, compensatory or paid leave, or other benefit not excluded under subparagraph (iii) of this paragraph.

    (iii) "Compensation" does not include any expenditure of a public service company for health, medical, dental, vision, or life insurance or disability pay.

  (4) "Supervisor" means an employee of a public service company, the parent company of a public service company, or any other affiliate of a public service company who:

    (i) using the employee's independent judgment:

      (1) is authorized by the employee's employer to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees;

      (2) is responsible for directing the work performance of other employees; and

      (3) is responsible for responding to employee complaints; or

    (ii) is employed in a bona fide executive capacity under the federal Fair Labor Standards Act.

(b) This section applies only to a public service company that is an investor-owned electric company, gas company, or combination gas and electric company.

(c) A public service company may not recover through rates any costs associated with:

  (1) membership, dues, sponsorships, or contributions to an industry trade association, group, or related entity exempt from taxation under Sec. 501(c)(6) of the Internal Revenue Code;

  (2) the acquisition, use, or allocation of costs associated with a private plane that is owned or leased by the public service company or its holding company; or

  (3) compensation for a supervisor that exceeds 110% of the maximum annual salary payable to the chair of the Commission for the same calendar year.

(d)

  (1) The board of directors of each public service company shall adopt a company-wide policy placing reasonable cost limitations on expenditures that the public service company intends to recover through rates for:

    (i) entertainment and events;

    (ii) office and facility renovations;

    (iii) transportation services, including aviation;

    (iv) staff development activities or events;

    (v) performance incentives; and

    (vi) other activities outside the scope of the normal course of business operations.

  (2) Each public service company shall send a copy of the policy adopted under paragraph (1) of this subsection to the Commission:

    (i) as soon as practicable; and

    (ii) each time the policy is updated, but not less than once every 5 years.

  (3) The Commission may review in a base rate proceeding the reasonableness of the cost limitations in a policy adopted under paragraph (1) of this subsection.

---

Md. Code Ann., Pub. Util. (as displayed at mgaleg.maryland.gov, October 16, 2026)