Rosemead-based Edison International’s stock has continued chugging along, even as scrutiny intensified over the actions and response of its electric utility subsidiary prior to and after last year’s destructive Eaton Fire.

Recent weeks have seen a flurry of activity regarding Southern California Edison. The parent company Edison International disclosed in its 2025 annual report released last month that the utility is under criminal investigation by the Los Angeles County District Attorney’s office around its role in triggering the wildfire in the Eaton area.

The company also has tweaked its wildfire compensation plan to increase payouts to renters. And news surfaced that the utility’s top executives – as well as the top executives of parent Edison International – have had their bonuses reduced by up to 40%.

Despite all this, Edison International’s share price has continued its steady upward climb. Late last month, the share value surged past the closing price on Jan. 6, 2025, the day before the Eaton Fire ignited. In the days since, it has continued to rise, topping $75 on Feb. 24, thanks to a favorable earnings report.

Edison reported fourth-quarter core earnings of $717 million, or $1.86 per share, compared to core earnings of $405 million, or $1.05 per share, in the fourth quarter of last year.

For all of 2025, Edison core earnings were $2.52 billion, or $6.55 per share, compared to $1.90 billion, or $4.93 per share, in 2024. (Core earnings exclude non-core items such as wildfire-related expenses.)

Those results beat the top end of Edison’s previously issued guidance for both the fourth quarter and full-year 2025, according to Ryan Michael Levine, analyst with Citi Global Markets Research in New York.

Levine noted that last September, the California Public Utilities Commission finally approved Southern California Edison’s rate case through 2028, authorizing increases for ratepayers between 4% and 12% over the previous rate levels. The rate increases are retroactive to the beginning of 2025.

“Edison’s (earnings per share) growth story returns to being rate base growth driven, as the (general rate case) and most cost recovery proceedings have resolved, and regulatory uncertainty is largely removed,” Levine said.

Fire impact

This focus on Edison’s core operations performance is remarkable considering the scope of the Eaton Fire and its expected impact on Edison for years to come.

The Eaton Fire began on the evening of Jan. 7, 2025, amid one of the fiercest windstorms the region had seen in years and following eight months with no measurable rain. The leading theory on the cause – though still not definitively proven – is arcing of electrical current that had jumped from live Southern California Edison transmission lines to a nearby long-dormant “zombie” Edison power line in Eaton Canyon.

Over the next week, the fire burned through more than 14,000 acres, destroying more than 9,400 structures – including more than 6,000 homes – and causing at least 19 deaths. The monetary damage from the fire is widely estimated to be in the tens of billions of dollars, though it will likely take years to fully measure the damage.

Given this uncertainty and the legal and regulatory battles to come, analyst Levine cautioned some difficult times could lie ahead. Specifically, he pointed to an ongoing study of alternatives to replace the state’s wildfire fund that utilities can tap into to pay damage claims from wildfires deemed to have been ignited by utility equipment. The current fund, which was established with the passage of SB 254 in 2019, is authorized for a capacity of $21 billion. The concern is that the billions of dollars in damage claims from the Eaton Fire could deplete the fund.

“The biggest driver of the stock continues to be SB254 study outcome and any legislation that could emerge before the end of legislative session in September,” Levine said.

There are other concerns. Edison’s ability to tap into the wildfire fund to pay damage claims hinges on a future finding from the California Public Utilities Commission that the utility acted in a “prudent” manner regarding fire mitigation measures prior to the Eaton blaze.

If the commission finds that Edison acted imprudently, shareholders could be on the hook for billions of dollars in damage claims.

Lawsuits galore

As expected with such a massive amount of fire damage, there have been hundreds of lawsuits filed against Southern California Edison. Most are from property owners and renters who suffered damage from the blaze. Lawsuits have also been filed by Los Angeles County, the cities of Sierra Madre and Pasadena as well as the U.S. Department of Justice.

There are also ongoing investigations of the fire’s cause by Los Angeles County Fire Department, the California Department of Forestry and Fire Protection and Southern California Edison itself. None of these entities had released any definitive findings as of late last month.

It is against that backdrop that the office of Los Angeles County District Attorney Nathan Hochman is conducting its investigations into Southern California Edison’s actions – or inaction – in the runup to the Eaton Fire’s ignition. No further details of the investigation or its progress has been released.

In response to an analyst’s question about that investigation during the earnings conference call last month, Edison International Chief Executive Pedro Pizarro said the utility is cooperating with county district attorney investigators. He also said the utility’s executives believe the utility acted in a reasonable manner prior to the fire ignition.

“We continue to be confident that SCE will be able to make a good faith showing that its actions were those of a reasonable utility operator,” Pizarro told analysts on the call.

Compensation fund

Last fall, Edison set up a wildfire compensation fund, designed as a way for Eaton fire victims to receive payouts in a more rapid manner than filing legal claims – as long as the fire victims drop their right to sue the utility. The fund was designed by Kenneth Feinberg and Camille Birosis, who were also instrumental in designing the compensation fund for those impacted by the 9/11 terrorist attacks.

Plaintiff’s attorneys have been urging fire victims not to opt for these payouts, holding out the promise that the victims will get higher payouts through legal settlements later on in the process.

Nonetheless, as of Feb. 13, 2,345 claims representing 6,778 individuals had been submitted to the wildfire compensation fund, according to an announcement from Edison. Of those, 507 claimants had received offers totaling more than $165 million, according to Edison. And 71 claim payments had been made as of that date, totaling more than $15 million.

“Reaching 500 offers reflects our commitment to helping the community recover as swiftly as possible,” Pizarro said in the announcement.

However, these numbers are merely a drop in the bucket, said Paul Zimbardo, equity analyst with Jefferies Group, in his latest report.

“(Edison) described as good progress, but ‘minuscule’ out of potentially tens of thousands of claims,” Zimbardo wrote.

Edison also has sweetened the fire victim compensation package a bit, especially for renters. In a separate announcement, Edison said that settlement offers for tenants whose buildings were significantly damaged or destroyed will now get three months of housing assistance at the “higher end of actual pre-fire rental rates or monthly fair rental value,” whichever is greater.

Previously, only the higher end of pre-fire rental rates was offered, which didn’t consider any rent spikes that occurred because of all the people displaced by the fire looking for places to live.

Yet even these new levels are regarded as inadequate by a coalition of three Eaton Fire victim groups: the Eaton Fire Survivors Network, the Eaton Collaborative and the Clergy Community Coalition. This coalition is calling for Edison to pay $200,000 up front to each displaced household.

Edison bonuses cut

Meanwhile, Edison has cut bonuses for top executives at both the Southern California Edison utility and parent Edison International, according to media reports after the earnings release.

Speaking to a reporter at Bloomberg News, which initially broke the news, Pizarro said that the company board’s compensation committee cut last year’s bonuses 40% for himself and for Southern California Edison Chief Executive Steven Powell. Other C-suite executives at both Edison and utility SCE who were on the job when the fire broke out had their bonuses cut 20%.

The New York Times reported that the total amount of bonus cuts was in the neighborhood of $2 million.

“I fully agreed with the compensation committee action,” Pizarro told Bloomberg. “While the bonus action was not a reflection on company performance or on the executives’ performance, it felt like the right balance in terms of showing our understanding that this has been a difficult period for a community.”